TMI Blog2015 (10) TMI 847X X X X Extracts X X X X X X X X Extracts X X X X ..... and had not availed benefit of CENVAT Credit on the capital goods by the said M/s. McCoy. In my considered view, the department should have demanded the Central Excise duty equivalent to CENVAT Credit availed on capital goods from M/s. McCoy, as having sold the assets they have parted with the capital goods on which CENVAT Credit was availed. There was a transfer of running industrial unit to the appellant there-in hence the High Court has come to a conclusion that the successor is liable to discharge the excise dues. In the case in hand, there is no excise dues which have been confirmed against the seller of the capital goods namely M/s. McCoy. In the absence of there being any dues that has been confirmed against M/s. McCoy, the same cannot be recovered from the main appellant - impugned order which confirmed the demand of duty as ineligible CENVAT Credit is unsustainable and liable to be set aside - Decided in favour of assessee. - Appeal No. E/522,523,524,525/10-Mum - Final Order Nos. A/863-866/2015-WZB/SMB - Dated:- 13-4-2015 - M V Ravindran, Member (J) For the Petitioner : Shri Naresh Thacker, Adv For the Respondent : Shri Ashutosh Nath, Asst. Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the main appellant here-in CENVAT Credit was ₹ 830/-. It is his submission that the main appellant had not availed any CENVAT Credit on the capital goods purchased from M/s. McCoy. It was his further submission that it is undisputed that the capital goods which were purchased by the main appellant was transferred to their own sister concern and hence there would be no revenue loss even if demand is raised against the main appellant. He then took me through the records and submits that the Central Excise Registration granted to M/s. McCoy was surrendered and no objection was raised by the department as to ineligible availment of CENVAT Credit by the said M/s. McCoy and no demands were also raised on them for the clearance of the capital goods. After taking me through Order-in-Appeal which is impugned before the Tribunal, he would submit that the first appellate authority has totally mis-interpreted the provisions of Cenvat Credit Rules, 2002 inasmuch as the said provisions of Cenvat Credit Rules, 2002 clearly indicate that the CENVAT Credit availed on capital goods and clearance of them should be reversed as such by a manufacturer. It is his submission that there is nothing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of CCE v. Jamshedpur Beverages - 2007 (214) ELT 321 (S.C.) for the proposition that the revenue neutrality will arise in such situation like this in hand. He also relied upon the ratio of the decision of the Hon'ble High Court of Gujarat in the case of CCE Service Tax v. Patel Alloys Steel P. Ltd. - 2014 (305) ELT 476 (Guj.) for the proposition that transfer of the capital goods to sister concern within the Commissionerate for undertaking jobwork, no error or illegality that the entire case is revenue neutral. He also relied upon the decision of the Hon'ble Karnataka High Court in the case of CCE v. Solectron Centum Electronics Ltd. - 2014 (309) ELT 479 (Kar.) for the proposition that there is no need to reverse CENVAT Credit on the goods purchased from Domestic Tariff Area and removed to EHTP unit; and also for the proposition that till the amendment of CENVAT Credit Rules 2004 as on 13.11.2007 in respect of used capital goods there was no liability to pay duty prior to that date and it was only that addition of the proviso thereto, that the situation changed. 7. I have considered the submissions made at length and perused the records. 7.1 On perusal of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urer of the final products shall pay an amount equal to the duty of excise which is leviable on such goods at the rate applicable to such goods on the date of such removal and on the value determined for such goods under section 4 or section 4A of the Act, as the case may be, and such removal shall be made under the cover of an invoice referred to in rule 7. It can be noticed from the above reproduced provisions during the relevant period that capital goods on which CENVAT Credit has been taken are removed from the factory of the manufacturer of final product is required to pay an amount equivalent to the duty of excise on the said capital goods on removal. As is noted from the facts that the appellant here-in had not manufactured any goods at the factory premises, which were purchased by them along with capital goods. It is also to be noted that when CENVAT Credit is availed by the manufacturer and is not contested by the department during the material period and credit was availed, the purchaser of the capital goods cannot be saddled with the duty liability of CENVAT Credit which was availed by the original manufacturer as I do not find any provisions of law which indicate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Ludhiana vs. Khalsa Cotspin (P) Ltd., reported in 2011 (270) E.L.T. 349 (P H) has held as under: The assessee having validly availed cenvat credit, same is required to be reversed only if goods were cleared in the same position without payment of excise duty. In the present case, it has been held by the Tribunal that goods were not cleared in the same position but after having been used and in such situation Rule 3(5) of the Rules will not apply. 12. Bombay High Court in the case of Cummins India Ltd., vs. Commissioner of Central Excise, Pune-III reported in 2007 (219) E.L.T. 911 (Tri- Mumbai) confirmed the order of the Appellate Tribunal which has held as under: The plain and simple meaning of expression as such would be that capital goods are removed without putting them to use. Admittedly, in the present case capital goods have been used for a period of more than 7 to 8 years. As such, interpretation given by the authorities below would lead to absurd results if an assessee is required to reverse the credit originally availed by them at the time of receipt of the capital goods, when the said capital goods are subsequently removed as old, damaged and un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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