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M/s. Intertool Engg. & Trading Co. (P) Ltd. Versus C.C.E., Delhi-II

2016 (3) TMI 399 - CESTAT NEW DELHI

Inadmissibility of CENVAT credit availed on Colchester CNC crane - central excise duty demand under Section 11A along with interest and equal amount of penalty - contention of Revenue that Colchester CNC machine was used exclusively for job work and therefore CENVAT credit of duty paid thereon was not admissible - Held that:- The supplier of the crane, i.e., the sister unit of the appellant was required to pay an amount equal to credit availed in respect of the capital goods, (namely, crane in t .....

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paid by the supplier-unit; the receiving unit was entitled to take credit of duty shown in the invoice. Incidentally, CBEC Circular No.877/15/2008-CX, dated 17.11.2008 is supportive of this view.

The appellant has clearly stated that the machine was used in its manufacturing unit. The balance-sheet figures show not only the charges received for use of the machine for job work, but also the value of dutiable goods manufactured by it. Even if initially the said machine was used only fo .....

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bviously shows that the short-levy has been worked out by assuming certain quantity of scrap likely generated without any evidence that that quantity of scrap was actually generated. Thus, the said demand is based on assumption and presumption and hence is clearly unsustainable. - Decided in favour of assessee - Appeal No. E/2568/2010-EX[SM] - Final Order No.50925/2016 - Dated:- 28-1-2016 - MR. R.K. SINGH, MEMBER (TECHNICAL) For the Petitioner : None For the Respondent : Mr. Vaibhav Bhatnagar, D .....

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case was called today, there was no representation on behalf of the appellant, but a letter has been received stating that the matter may be decided on merits and accordingly, I take up the appeal on merits. 3. The facts of the case are as under:- (i) The appellant received from its sister unit a crane under invoice dated 06.04.2005 which showed its depreciated value, but the amount of CENVAT credit taken was ₹ 2,92,516/-, which was the duty paid by the sister unit when acquiring the cran .....

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The appellant was also held to have short paid duty of ₹ 6,389/- on the scrap generated during the years 2005-06 and 2006-07. 4. The appellant has contended that (i) its sister unit has debited the entire amount of CENVAT credit taken on the crane at the time of its acquisition and it has only taken the credit of duty shown in the invoice and if the duty was paid in excess then that issue is to be taken up at the supplier unit s end. (ii) The Colchester CNC machine was utilised by them for .....

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rther, the audit in its report had observed that the CNC machine was being used exclusively for job work and no duty was paid/payable on goods produced on job work basis and therefore credit on CNC machine was not allowed. 6. I have considered the contentions of both sides. I find that as per Rule 3(5) of the CENVAT Credit Rules, 2004 are stipulated as under:- When inputs or capital goods on which Cenvat Credit has been taken are removed as such from the factory, or premises of the provider of o .....

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moved from the factory as such, i.e., as capital goods. Once the duty paid on the crane was shown in the invoice, the appellant was entitled to take the credit thereof. If it is contended by Revenue that duty was paid in excess, then that issue is to be taken up with the supplying unit by the concerned authority having jurisdiction over the supplying unit and it is not open to the central excise authority having jurisdiction over the appellant to question the correctness of duty paid by the supp .....

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