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2022 (10) TMI 1005 - AT - Central ExciseCENVAT Credit - removal of capital goods as such - power plant - Rule 3(5A) of Cenvat Credit Rules, 2004 - it appeared to Revenue that the appellant have not given proper information to the Department of such transaction wherein they transferred their power plant to SPPL on as is where is basis under BTA - extended period of limitation - HELD THAT:- The appellant-seller agreed to sell, convey, assign and transfer to the purchaser, all the assets and liabilities as defined in Schedule-I and Schedule-II, free from all encumbrances as a going concern and as an inseparable whole, on slump sale basis for an aggregate consideration of Rs. 85 cr. as set out in Clause 3 of the BTA. It is not in dispute that the appellant as seller has transferred the entire movable and immovable assets and liabilities as a going concern on “as is where is basis” to the purchaser without uprooting or physically shifting the capital goods from the place of installation of the power plant. This is clear from preamble clause (E), clause 2.1.1 and clause 3.1.1 of the BTA. In the erstwhile Central Excise Rules, 1944 or the Central Excise Rules, 2002, the manufacturer of excisable goods was required to pay duty on the goods removed from the factory or the bonded warehouse. The sale of goods or transfer of ownership of the goods from the seller to the buyer, is not the criteria to cast duty liability on the manufacturer/seller of excisable goods. What is important is the physical removal of excisable goods from the factory of the manufacturer. Both the appellants viz. M/s Simbhaoli Sugars Ltd., Chilwaria and Simbhaoli were not required to reverse the cenvat credit on sale of capital goods, as part of running power plant, in terms of rule 3(5A) of CCR, 2004. We further hold that no penalty is imposable under Rule 26 of CER, 2002 on the Chairman of the appellant company. In view of the ruling of Hon’ble Madras High Court in the case of THE COMMISSIONER OF CENTRAL EXCISE VERSUS CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, M/S. DALMIA CEMENTS (BHARAT) LTD. [2015 (7) TMI 267 - MADRAS HIGH COURT], which have been accepted by the CBIC as clarified in the Circular No. 1063/2/2018-CX, we hold that in the facts and circumstances of the present case, there is no removal of capital assets/power plant. As There have been no removal, the provision of Rule 3(5A) of Cenvat Credit Rules are not attracted. Appeal allowed - decided in favor of appellant.
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