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2023 (10) TMI 112 - CESTAT KOLKATAClandestine removal - irregular availment of Cenvat Credit - removal of 556.780 MTs of old and used C.I. Moulds (capital goods) without payment/reversal of Cenvat credit, in the guise of captive use during the period from 2006-07 to 2008-09 - HELD THAT:- It is found that the applicant were maintaining the Mould Register, wherein receipt/consumption of the CI Moulds were duly entered. From the Mould register, we find the Appellant has received 434.644 MT of C.I.Mould during the period 2006- 07 to 2008-09 and 122.136 MT remained as opening balance. The Appellant contented that all the moulds purchased during the material period were put into use during the relevant period. There are force in the submission of the Appellant that after receipt of the Moulds, the same were utilized in the manufacture of finished goods namely, MS ingots and in the process of manufacture, the C.I. moulds were exhausted, and ultimately, the same were melted along with other raw materials for manufacture of the finished goods - there is no provision in the Cenvat Credit Rules, 2004 to reverse the credit availed on capital goods after they were put into use in the manufacture of final products, even if they are worn out or damaged due to wear and tear. In absence of physical presence of such moulds in the factory, the department alleged that those were cleared clandestinely and hence demanded the Cenvat credit availed on such Moulds - It is observed that non availability of the moulds in the stock or physical absence of goods, cannot be a reason to allege clandestine clearance. There must be positive evidence available on record to substantiate the allegation of clandestine clearance. In the present case, the department has not brought in any evidence to establish clandestine clearance of the used C.I. Moulds. The Appellant contended that these mould were capital goods on which Cenvat credit has been availed. Admittedly, when the credit in respect of these capital goods was availed, the same was in order. These capital goods have been put to use for a number of years, when the same were ultimately unfit for use, they were scrapped. The Appellant claims that the scrap were used in the furnace for manufacture ingots. However, the department's allegation is that there was no evidence for such consumption - there are no justification for reversal of Cenvat credit availed by the Appellant on the said capital goods, which after being put into use scrapped. Thus, the Appellant has taken Cenvat credit correctly on the capital goods, namely C.I. Moulds and there is also no provision in the Cenvat credit Rules to reverse the Cenvat credit when they are scrapped after put into use. In view of the above, the Appellant is not required to reverse the Cenvat credit availed on the capital goods, M.I. Moulds. Since, the credit is not liable to be reversed, there is no liability of interest or penalty. Accordingly, the penalty imposed in the impugned order is also set aside. Appeal allowed.
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