TMI Blog2006 (3) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... redit of Rs. 2,13,36,000/ and utilised the same towards payment of duty on their final products. However, the said Rotor assembly was not installed by them in their factory premises and as such was not used in the Captive Power Plant II, for which the same was purchased. The said Captive Power Plant II was subsequently sold by them to M/s. SAIL Power Supply Co. Ltd. during March 2001 at a consideration of Rs. 211 crores. The Rotor/Insurance spares were also sold by the appellant company to M/s. SAIL Power Supply Co. Ltd. along with the power plant. There is no dispute about the above facts. 2. As a result of certain investigation conducted and the statements of various authorised representatives recorded, the Revenue was of the view that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al goods in the factory of the manufacture of final product is therefore satisfied. They have also contested the reversal of credit on the ground that same was taken originally in accordance with the provisions of Rule 57Q and as such was rightly availed on the strength of valid duty paying documents, the same would become indefeasible. Their main argument is that removal, contemplated under Rule 57AB (IC), is physical removal and not deemed removal. For the above proposition, they have referred to various decisions; which we shall be considering in the subsequent paragraphs. 3. As against the above contention of the appellant, the adjudicating authority has held that transfer of the Rotor/Insurance spares alongwith sale of Captive Power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... below for ready reference: Sub Rule (1C) of Rule 57AB as existed on 7.3.2001, the date of transfer of business, reads as under: "when inputs or capital goods, on which credit has been taken are removed as such from the factory, the manufacturer of the final products shall pay an amount equal to such goods on the date of such removal on the value determined for such goods under Section 4 of the said Central Excise Act such removal shall be made under the cover of an invoice referred to in Rule 52A." Sub Rule (I) of the said Rule 57AB reads as under: "the amount paid under Sub-rule (1C) shall be eligible as credit as if it was a duty paid by the person who removed such goods under Sub rule (1C)." 6 As rightly observed by the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmediately next to the appellant's plant and then removing the capital power plant including the disputed capital goods, the same would have been admittedly held to be removed. In the present case, the Captive Power Plant and the disputed capital goods stand removed to the new unit along with the land. Can in such circumstances it had to be held that there is no removal merely because the capital goods have not been physically picked up and removed to a new piece of land and instead have been removed from the appellant's factory along with the land. The legislative intent, while reading the modvat provisions in their entirety, comes out clear that in case of modvatable capital goods not being in use of the assessee, who availed the credit o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of application of Rule 57F (2) does not arise inasmuch as the said sub rules are self contained and covers transfer of the credit lying in the books of the seller. However, we find that in that case the issue before the Bench was as regards transfer of the credit on change in ownership of the factory. In the present case, the credit earned by the first appellant cannot be transferred to the second inasmuch as the second unit is only manufacturer of electricity, which is not liable to pay Central Excise duty. 10. In the case of Tata Motors Pvt. Ltd. vs. CCE, Jamshedpur 2005 (71) RLT 204 (CESTAT-Mum), the Tribunal has held that capital goods hived off to others/subsidiaries within same premises cannot be equated with physical removal of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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