Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2019 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (1) TMI 1380 - AT - Central ExciseCENVAT Credit - capital goods - moulds and dyes - credit on depreciated value of goods - Rule 3(5)(a) of the Cenvat Credit Rules 2004 - Held that:- CENVAT credit in respect of capital goods can be taken up to 50% in the same financial year and the balance of cenvat credit in the subsequent year except component spares, accessory refractories and refractory material, moulds and dies and goods falling under heading 6805, 6804 of the First Schedule of the Central Excise Tariff Act. Likewise under subrule 5A such cenvat credit is allowed even if capital goods is sent to job worker provided the same is received back in the factory within 180 days of their being sent to job worker. Sub-rule 5(b) which is applicable to the instant case does not prescribe such 180 days stipulation in availing such credit. Therefore, even if the moulds and dies are kept with job worker for production of goods on behalf of manufacturer, such credit can be availed for an indefinite period. Consequent upon such removal to another factory though available in the same premises, would have the effect of reversal of entire cenvat credit availed had the appellant not shown him as job worker, but while the mould and dies were with the job worker, appellant sold it to M/s. General Motors with adequate payment of VAT. Going by the definition of sale as found in the Central Excise Act under section 2(h), sale means any transfer of the possession of goods by one person to another in the ordinary course of trade or business for cash or deferred payment or other valuable consideration. Such a transfer with physical delivery of possession was not made but appellant had earned profit on sale of such mould and dyes in the guise of recovering the cost from General Motors. Considering the fact that such an exercise was carried out by the appellant is in exercise of erroneous legal interpretation of the provisions of the Cenvat Credit Rules 2004 and credit was availed by reflecting the same in the cenvat credit accounts, no mala fide can be attributed to the appellant so as to call for imposition of any penalty. Accordingly while upholding the demand along with interest, the penalty is set aside - appellant is liable to pay balance duty amount of ₹ 6,04,090/-/- along with applicable interest with effect from 19.12.2011 - Penalty under section 11AC(c) is hereby set aside - appeal allowed in part.
|