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2023 (10) TMI 675 - CESTAT CHANDIGARHReversal of CENVAT Credit - denial on the grounds that the moulds and dyes were not purchased by the appellants but were simply supplied by the OEMs along with the credit thereof - Opportunity of being heard not provided - Violation of the principles of natural justice - HELD THAT:- The appellants not being the owners of the goods cannot avail credit.We find that the requirement for availing CENVAT credit on inputs and capital goods is that the same should have been received in the factory and that the credit availableshall be of the duties specified therein and barring the exclusions mentioned therein in the Rules and following the conditions mentioned therein. It is found that there is no condition, whatsoever, that the capital goods should necessarily be purchased or owned by the assessee. The stress of the Rules is on the use of inputs and capital goods rather than the ownership. It is on record that the appellants have reversed the credit availed, whenever such moulds and dyes have been returned back to the OEMs, in terms of Rule 5 of CENVAT Credit Rules. The crux of the argument of the Department is that the appellants have not purchased the capital goods and as such are not the owners of the capital goods and hence, the credit availed by them is incorrect - there is no provision in the CENVAT Credit Rules prescribing that the ownership of capital goods is a precondition for availing CENVAT credit - the appellants have satisfied the conditions required for availment of CENVAT credit under the Rules and as such, the credit cannot be denied for the reason that they have not purchased the capital goods and hence are not owners of the said capital goods. Violation of the principles of natural justice - Opportunity of being heard not provided - HELD THAT:- The appellants have demonstrated that opportunity of being heard has not been given to them even though; they have approached the office of the Commissioner on the dates on which personal hearing was fixed. There are no cognizance of the Letter dated 13.10.2011 has been taken by the Adjudicating Authority. There is nothing on record to show whether that letter has been replied or otherwise. The learned Counsel for the appellants also submits that the show-cause notice is time-barred. Considering the facts of the case and particularly, the fact that the appellants have been filing ER-1 Returns regularly, there is merit in the argument of the learned Counsel for the appellant - as the appellant has a strong case on merits, there is no need to go into the issue of limitation. The impugned order is set aside and the appeal is allowed.
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