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2009 (8) TMI 545

..... g Ltd. for manufacture of automobile components for that concern. The agreed price of the pattern tool being Rs. 75 lacs and the same value was only billed to Maruti Udyog Ltd., by way of invoice under Rule 52A and 173G of Central Excise Rules, 1944. But in real sense, there was no removal of such goods made by appellant for which the invoice was a mere intimation and not a document to make delivery of the pattern tool to serve the purpose of Rule 52A of the Central Excise Rules, 1944 for which no duty is realizable. In the light of the decision of J.K. Cotton Spinning & Weaving Mills Ltd. v. UOI, held that- Contention of Revenue that mere issuance of invoice is sufficient to call for reversal of Cenvat credit, is inconceivable. In view of .....

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..... folder is that this appellant was to supply pattern tool at a cost of Rs. 75 lakhs to Maruti Udyog Ltd. But as per terms of contract and understanding of parties, although purchase order required the appellant to supply pattern tool to Maruti Udyog Ltd., that was to be retained by the former for use in manufacture of automobile components for the later. According to the appellant, para 3 of the purchase order at page 19 conveys such intention of the parties showing that two sets of pattern toolings although agreed to be supplied by way of sale by the Appellant that was really meant to be used for manufacture of automobile components by the appellant on behalf of Maruti Udyog Ltd., for which that was to be retained by the appellant as custod .....

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..... a factory or a ware house. If such essential feature is absent, there cannot be levy of any Central Excise Duty nor can be denial of any incentive if that is available under any other provision of the statute. 5. Ld. Counsel also submits that show cause notice at page 27 of the appeal folder has brought out charge against the Appellant under Rule 52A calling for compliance under Rule 173G and for ultimate recovery of Modvat credit of Rs. 25,85,800/- under the shelter of Rule 57U of Central Excise Rules, 1944. According to him when Rule 52A does not apply, there is no question of application of Rule 173G of Central Excise Rules, 44. Further, when there is no application of Rule 52A, there shall be no application of Rule 57U for recovery. 6. .....

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..... ing to the meaning given in para 38 of the Apex Court judgment. That paragraph categorically says that the word removal contemplates physical movement of goods from one place to another. Therefore, following ratio of these two decisions, entire proceedings initiated in the show cause notice at page 27 is unsustainable. 8. Ld. DR Shri Sansar Chand supports order of the authorities below and submits that once invoice was issued by appellant as appearing at page 24 of appeal folder indicating that the same was under Rule 52A and Rule 173G of the Central Excise Rules, 44, duty becomes payable. When no duty was paid, the Cenvat credit enjoyed in respect of the pattern tools is reversible. Shri Chand relying on para 2 of the purchase order at pag .....

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..... n fulfillment of the contractual obligation of parties as appearing at page 19 of the appeal folder which was a purchase order placed by Maruti Udyog Ltd. with the appellant for supply of two pattern tools. Purchase order placed by Maruti Udyog Ltd. indicated cost of the pattern tools to be Rs. 75 lakhs. Manner of discharge of the payment by Maruti Udyog Ltd. for such purchase as well as use thereof by the appellant on behalf of Maruti Udyog Ltd. (without delivery of the same to Maruti Udyog Ltd.) was agreed condition between the parties. While this is the position, the appellant got a show cause notice on 13-3-99 i.e. one month after the invoice dated 19-2-99 was issued in terms of page 24 of the appeal folder. Charge in the show cause not .....

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..... ved its fairness indicating that it is prepared to pay excise duty on physical removal of the pattern tools. Such a fair statement enables to conclude that there was no case for revenue to invoke Rule 52A in absence of evidence of delivery without satisfying the twin conditions of the Rule. The conditions of the Rule are: (1) That there should be delivery of the excisable goods; and (2) No such delivery shall be without invoice signed by owner of the factory or his authorized agents. 13. Therefore to invoke Rule 52A, not only physical delivery of the excisable goods is necessary but such delivery should also be accompanied by an invoice under that Rule. Such essential ingredients of law is not present in the present case. The case clearly d .....

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..... sufficient to call for reversal of Cenvat credit, is inconceivable. In view of the ratio laid down by the Apex Court in the aforesaid case, when no physical removal had at any time occurred till issuance of show cause notice nor there was any evidence on record to support case of revenue, impugned proceeding is fatal. 16. Revenue s another stand is that the payment criteria laid down in para 2 of the purchase order is not supported by page 24. Para 2 has no relevance to the case since para 1 which is dealing with the cost was already subject matter of page 24 of the appeal file. 17. In view of the reason given and following the ratio laid down in aforesaid decisions, the appellant shall succeed for which we allow the appeal, setting aside t .....

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