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2014 (12) TMI 72 - CESTAT NEW DELHIWaiver of pre deposit - CENVAT Credit - the Investigating officers were of the view that the Kathua unit was clearing fully finished Sputtering Targets which were being exported as such and only to wrongly avail Cenvat credit, some processing was being shown at Nathupur, Sonepat unit while in fact, there was no manufacturing activity in that unit and hence the Cenvat credit being availed by Nathupur unit in terms of Rule 12 of the Cenvat Credit Rules, 2004 was contrary to the provisions of law. - Held that:- Sputtering Targets were being cleared for export from Nathupur unit under ARE-1s and permission for in factory examination and sealing had been given by the Jurisdictional Central Excise Authorities. The ARE-1s bear the certificate signed by the Jurisdictional Central Excise Superintendent and the Jurisdictional Inspector certifying the examination of the export consignments and payment of duty in respect of the same. When the Jurisdictional Central Excise officers were visiting the Nathupur unit for examination of the export consignments and their sealing, it is inconceivable that they would not be aware of the activity in the factory which they were visiting. There is no allegation against the departmental officers, who had given permission for in factory examination of the export consignments and the officers who had regularly visited the Nathupur unit for examination and sealing of the export consignments, that they were in connivance with the appellant. In view of this, at this prima facie stage, it is difficult to accept the Department’s allegation that there was no manufacturing activity at Nathupur unit and it was a dummy unit and it is Kathua unit which was manufacturing and clearing fully finished Sputtering Targets. Classification of Sputtering Targets - Held that:- Sputtering targets consist of a flat piece of copper bonded with a layer of gold or silver or any other metal whose film is to be deposited on a substrate. In Physical Vapour Deposition Machine, the Sputtering Targets is bombarded by very high energy atoms of an inert gas like Argon as a result of which the atoms of gold/silver/other metal in the Sputtering Target get ejected, and are deposited on a substrate like silicon wafer, forming a thin film. Thus except for use with Physical Vapour Deposition Machine, there is no other use of the Sputtering Targets. In view of this, the Sputtering Targets have to be treated as component of the “Physical Vapour Deposition Machine” of heading 8543 and prima facie would be classifiable under sub-heading 85439000. Departmental officers were aware of the activity at manufacturing unit of the appellant company at Nathupur and hence Nathupur unit cannot be accused of wilful of suppression of any information with intent to evade the payment of duty by wrongly availing the Cenvat credit and for this reason, neither longer limitation period under Section 11A(1) would be invokable nor the penalty under Section 11 AC would be imposable. The entire Cenvat credit demand would be time-barred. - appellant have prima facie case in their favour. The requirement of pre-deposit of Cenvat credit demand, interest thereon and penalty is, therefore, waived for hearing of the appeal and recovery thereof is stayed - Stay granted.
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