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2009 (8) TMI 545

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..... rn 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 the reason given and following the ratio laid down in aforesaid decisions, the appellant shall succeed for which we allow the appeal, setting aside the impugned order. - E/391/2006 - 731/2009-EX(PB), - Dated:- 18-8-2009 - S/Shri D.N. Panda, Member (J) and Rakesh Kumar, Member (T) S/Shri S.C. Kamra and G.K. Mahajan, Advocates, for the Appellant. Shri S. Chand, DR, for the Respondent. [Order per: D.N. Panda, Membe .....

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..... 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 custodian of same. One of the conditions of such retention is that property over the pattern tools lies with Maruti Udyog Ltd. and that shall be maintained by the appellant without charging any cost and use of those pattern tools shall be guaranteed for a minimum life for manufacturing 1,25,000 OK castings from the two sets of pattern toolings. 3. Ld. Counsel Shri Kamra submitted that while factual position wa .....

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..... te 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. Shri Kamra, Ld. Counsel further submits that this appellant has made the revenue aware in terms of page 24 of the appeal folder that the pattern tools were delivered from the Baddi unit of the appellant, suffering excise duty and such suffering is proved from page 22 and 23 of the appeal folder carrying purchase invoices. The goods so delivered was also brought to the knowledge of Revenue indicating tha .....

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..... nce 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 page 19 submits that terms of payment was settled between the parties calling for 50% of the tooling cost to be paid upon acceptance of letter of intent and balance 50% of the cost of pattern tool alongwith the excise duty and taxes to be paid on sample approval. Therefore, Revenue s contention is that Modvat credit of Rs. 25,85,800/- enjoyed by the appellant is to be recovered/disallowed in terms of Rule 5 .....

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..... he 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 notice was that Modvat credit of Rs. 25,85,800/- was enjoyed by the appellant in respect of two sets of pattern tool was not admissible in terms of Rule 52A in view of sale thereof effected violating provision of Rule 173G and that called for recovery of modvat credit of Rs. 25,85,800/- in terms of Rule 57U of the Central Excise Rules, 1944. 12. Appellant s grievance before the authorities below was that th .....

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..... 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 demonstrates that taking delivery of pattern tools by the appellant from the factory of its sister unit, repossession thereof was not given by appellant to Maruti Udyog Ltd. by any physical delivery. Rather the same was used in its factory to manufacture excisable goods for Maruti Udyog Ltd. The appellant having received the pattern tool from its sister unit directly on behalf of the Maruti Udyog Ltd., an .....

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