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2015 (12) TMI 1493 - CESTAT NEW DELHIEligibility of CENVAT Credit - returned goods - Credit of duty paid on the vehicles at the time of their initial clearance which were later brought back to the factory due to damage - Held that:- Admitted facts of the case are that the appellants discharged due duty at the time of clearance of vehicle. Due to damage in transit, the said duty paid vehicle is brought back to the factory for being re-made or salvaged to the extent possible. We find that the case of the appellant is clearly covered by the provisions of Rule 16 (1). The said rule permits Cenvat credit of the duty paid as if such goods are received as inputs under the Cenvat Credit Rules, 2002 and to utilize this credit according to the said rules. Clearly a legal fiction has been created in this rule. In normal course duty paid motor vehicle cannot be an input for making same type of motor vehicle. Here the said vehicle is deemed to have been input only because it is brought into the factory for being re-made, refined, re-conditioned or for any other reason. We find the scope for which a duty paid vehicle can be brought to the factory is very wide and includes the processes undertaken by the appellants in the present case - When the vehicle is brought back to the factory for the intended purposes as stipulated under Rule 16 (1) the credit of duty paid on such vehicle is available to the appellant. Such vehicles undergo a process of manufacture and become part of process of production of new vehicle is settled and undisputed. As such, we find no legal basis for denial of credit either partly or fully in respect of such vehicles in terms of clear provisions of Rule 16 (1) Further, first show cause notice 'being completely time barred as the issue involved under dispute is well within the knowledge of the Department for long and has been-subject matter of decisions including by this Tribunal - Impugned order is set aside - Decided in favour of assessee.
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