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M/s. Jayaswal Neco Industries Limited Versus Commissioner of Central Excise, Nagpur

2016 (5) TMI 1197 - CESTAT MUMBAI

Entitlement for availment of Cenvat credit - receipt of duty paid goods i.e. Oil Slump Body, Cylinder Head & Rover Cylinder - availed Cenvat credit thereon - reissue the same on payment of duty or for export - no manufacturing activity has been undertaken - Held that:- the assesee is entitle to avail Cenvat credit on the duty paid goods even though the said duty paid goods does not undergo manufacturing process. The only condition is that if the duty paid goods is cleared after process which amo .....

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e 16, therefore, the inward transportation of such goods shall be undoubtedly qualified as input service, even as per the interpretation drawn by the Ld. Commissioner, therefore the credit on inward GTA service in respect of transportation of the goods namely Oil Slump Body, Cylinder Head & Rover Cylinder is also admissible. Since we are of the view that Cenvat credit in respect of the goods is admissible in terms of Rule 16 and consequently Cenvat credit is admissible on GTA service, we are not .....

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Original No. 109/2010-11/C dated 4/3/2011 passed by the Commissioner of Central Excise & Customs, Nagpur whereby Ld. Commissioner passed following order: 1) I disallow the Cenvat Credit of duty on Inputs amounting to ₹ 1,45,10,363/-[BED ₹ 1,41,95,115/- + Education Cess ₹ 2,89,007/- + Secondary & Higher Secondary Education Cess ₹ 26,241/- ] ( in words: Rs. One Crore Forty Five Lakhs Ten Thousand Three Hundred and Sixty Three only) taken on the Central Excise duty, .....

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Nine only] taken on Service tax, Education cess and Secondary & Higher Secondary Education Cess and order the recovery of the same from the noticee in terms of Rule 14 of Cenvat Credit Rules, 2004 read with first proviso to Section 11A of Central Excise Act, 1944 along with interest. 3) I order the recovery of the interest at the appropriate rate from the noticee, on the amount demanded as above in terms of Section 11AB of the Central Excise Act, 1944. 4) I impose penalty of ₹ 1,94,65, .....

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ules, 2004. The appellant during the period from 1/4/2005 to 31/3/2010, received 2686 Nos. of Oil Slump Body, Cylinder Head & Rover Cylinder from their sister concern M/s. NSSL Ltd. MIDC, Hingna, Dist. Nagpur and sold to its constomer without doing any manufacturing process and thereby such goods had been treated in common parlance of business activity. For the transport of aforesaid goods, while procuring the same from their sister concern, appellant paid service tax on GTA on reverse charg .....

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ed on the ground that since goods namely Oil Slump Body, Cylinder Head & Rover Cylinder are not inputs, the transportation of the goods cannot be treated as inward transportation of goods which are other than inputs. 3. Shri. Gajendra Jain, Ld. Advocate with Shri. Rajesh Ostwal, Advocate for the Appellants appearing on behalf of the appellant submits that the appellant purchased Oil Slump Body, Cylinder Head & Rover Cylinder on payment of duty under the cover of duty paying excise invoic .....

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facture, Cenvat credit is permissible in the nature of the above transaction as provided in Rule 16 of Central Excise Rules, 2002. In this support he placed reliance in case of CCE Vs. Tapsheel Enterprises[2007(216) ELT 284 (T)] and Brakes India Ltd Vs. CCE[2007(214) ELT 389(T)]. He submits that all the goods i.e. Oil Slump Body, Cylinder Head & Rover Cylinder sold by the appellant falls under Chapter 87 and Section XVII Section Note 6 to Section XVII states that conversion of incomplete and .....

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is between the group companies, had the appellant and NSSL followed alternate procedure under Rule 4(5)(a) of Cenvat Credit Rules, 2004, no demand would have been arisen. In this regard, he placed reliance on the following judgments: (a) International Auto Ltd Vs. CCE[2005(183) ELT 239(SC)] (b) Lawkim Limited Vs. CCE, Pune- II[2007(218) ELT 142(T)] (c) P.R. Rolling Mills Private Limited Vs. CCE[2010(249) ELT 232(T)] He submits that it is undisputed that against the availment of Cenvat credit, th .....

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s in question shall be treated as clearance of inputs as such. In that event whatever Cenvat credit was availed is required to be paid on the removal of input as such. In the present case on the quantum of domestic clearance the excise duty was paid to the tune of ₹ 58,24,273/- as against the Cenvat credit availed on the same goods amounting to ₹ 57,12,225/-. For this reason also whatever credit was availed stand paid back, hence no further recovery can be made. He submits that as re .....

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these goods are admissible for Cenvat credit. He further submits that the quantification of Cenvat credit of GTA service was wrongly done by the Adjudicating authority, for this reason that the department has taken entire amount of freight for the period 2005-06 to 2008-09 whereas actual transportation of machine casting from the appellant to NSSL and NSSL to the appellant is involving service tax of ₹ 8022/- only therefore there is apparent mistake in the show cause notice as well as adju .....

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reiterates the findings of the impugned order. 5. We have carefully considered the submissions made by both sides. 6. We find that the Ld. Counsel made various alternative submissions. We find that activity of the appellant i.e. receipt of duty paid goods i.e. Oil Slump Body, Cylinder Head & Rover Cylinder, availment of Cenvat credit thereon and reissue the same on payment of duty or for export is squarely covered by Rule 16 of the CER, 2002, which is reproduced below: Rule 16. Credit of du .....

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h the goods are subjected before being removed does not amount to manufacture, the manufacturer shall pay an amount equal to the CENVAT credit taken under sub-rule (1) and in any other case the manufacturer shall pay duty on goods received under sub-rule (1) at the rate applicable on the date of removal and on the value determined under sub-section (2) of section 3 or section 4 or section 4A of the Act, as the case may be. Explanation. - The amount paid under this sub-rule shall be allowed as CE .....

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