TMI Blog2016 (4) TMI 685X X X X Extracts X X X X X X X X Extracts X X X X ..... een physical removal or not, fact remains that proper procedure has not been followed, though credit would have been available to the lessee. Hence, the issue is purely academic which cannot lead to raising of a demand by the Revenue as there is no loss to the revenue. The fact that the appellant lessor is a manufacturer utilizing the inputs and discharging on the final 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and no objection was raised by the jurisdictional authorities. 3. At the time of the internal audit, it was indicated that the appellant ought to have 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 penalty under Rule 15 of the CCR 2004. The appellant have put forth their contention before the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansfer 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 cannot be returned to the lessor in the event of termination of lease agreement; that the requirement of reversal of credit arises only when the inputs or WIP are removed from the factory and in absence of any such removal, no reversal of credit is legally required since the same are transferred to the lessee on sale basis which were duly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the inputs have been kept out of the lease transaction separately. Since Rule 10 of the CENVAT Credit Rules is not applicable, it has to be seen independently, whether the transfer of Credit on the inputs which are not physically removed is in order. Though there is no physical removal of such inputs, in my view the admitted position is that there is a sale which would invite raising an invoice and which would necessitate payment of duty equivalent to the credit taken.And the same could have been availed by the lessee to take credit. Therefore, whether there has been physical removal or not, fact remains that proper procedure has not been followed, though credit would have been available to the lessee. Hence, the issue is purely academic wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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