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M/s Jaishree Packaging Versus CCE, Chennai-I

2016 (4) TMI 685 - CESTAT CHENNAI

Demand of duty and imposition of penalty - Whether the transfer of unutilized credit by the appellant who is the lessor, on lease of capital goods and factory building and on sale of inputs is in order - Sale of inputs as such and at the same time the factory and capital goods have been let on lease. - Held that:- though there is no physical removal of such inputs, the admitted position is that there is a sale which would invite raising an invoice and which would necessitate payment of duty .....

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products is not under dispute. Therefore on purchase of the inputs, the lessee is entitled for the credit. Duty demand alongwith penalty under Rule 15 of the CENVAT Credit Rules is set aside. - Decided in favour of appellant - Appeal No. E/42572/2013 - Final Order No. 40592 / 2016 - Dated:- 8-4-2016 - Shri P. K. Choudhary, Judicial Member For the Petitioner : Shri. R. Parthasarathy, Advocate For the Respondent : Ms. Indira Sisupal, AC (AR) ORDER Per P. K. Choudhary M/s Jaishree Packaging, herei .....

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referred to as lessee) by leave and license agreement date 14.04.2009. 2. The appellants had stock of raw materials in the form of kraft paper and also WIP (i.e partially processed cartons and boxes) which were also transferred to the lessee by raising sale bills, though there was no physical removal of inputs in the form of raw materials and WIP. The Appellant has also given a letter to the jurisdictional authorities of their intention to transfer the stock of inputs as well as WIP without pa .....

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reversed the credit in respect of stock of inputs and WIP which was transferred to the lessee by raising the sale invoices and further it was observed that the cenvat credit rules will be applicable only in respect of transfer of ownership of the company along with the assets and liabilities which was not so in the instant case. A Show cause notice was issued to the appellant demanding ₹ 2,15,167 for the wrong availment of Cenvat credit on the inputs and semi finished goods and proposed p .....

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0/- under Rule 15 of the CENVAT Credit Rules was imposed. Aggrieved by the order, the appellant had preferred an appeal before the Commissioner (Appeals) wherein the order of adjudication was confirmed. Hence the present appeal. 4. The appellant was represented by Mr. R. Parthasarathy, Consultant and the Respondent was represented by Ms.IndiraSisupal, learned A.R. (AC). 5. The consultant submitted that the learned Commissioner (Appeals) has grossly erred in his conclusion that Rule 10 of the CEN .....

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bilities; that the stipulation of transfer of liability is applicable only in respect of transfer of ownership of the factory on account of sale, merger, amalgamation or joint venture; that Rule 10 provides for transfer of credit and also inputs even in respect of transfer of factory on account of lease of the factory and in the case of lease, there is no physical transfer of the location of the factory; that it was legally impossible to transfer the raw materials and WIP on lease since the same .....

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judgements of the High Court and Tribunal and placed heavy reliance on the following rulings viz., Metzeller Automotive Profiles India Pvt. Limited, reported in 2004 (167) ELT 208 (Tri Del). The imposition of penalty was also contested. 6. On the other hand, the Learned DR reiterated the findings in the order in appeal and further placed reliance on the decisions in Majestic Auto Limited vs. Commissioner of Central Excise, Ghaziabad, reported in 2004 (173) ELT 145; Yee Kay Technocrat (P) Limited .....

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