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M/s Lupin Limited Versus CCE, Bhopal

2016 (8) TMI 346 - CESTAT NEW DELHI

Demand - Revarsal of Cenvat credit under Rule 3(5) of the Cenvat Credit Rules, 2004 - Reorganization of part of assets of DTA into 100% EOU - Capital goods in which Cenvat credit was availed in the original DTA unit was segregated as part of the two EOUs - Held that:- Rule 3(5) of the Cenvat Credit Rules contemplates payment of an amount equal to the credit availed in respect of inputs and capital goods when such goods are removed as such from the factory. The thrust of the appellant’s argument .....

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as much as EOUs are entitled to take as well as utilize Cenvat credit on inputs as well as capital goods, for payment of duty on the DTA clearances, the demand of duty made in the impugned order, if paid, will be available as Cenvat credit to the 100% EOUs. - Decided in favour of appellant - Excise Appeal No. 3003 of 2007 - Final Order No. 52172/2016 - Dated:- 14-6-2016 - Ms. Archana Wadhwa, Member (Judicial) and Shri V. Padmanabhan, Member (Technical) Shri B.L. Narsimhan, Advocate - for the app .....

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ion of the original unit alongwith another existing 100% EOU in the name and style of EOU-Pril . Some of the capital goods in which Cenvat credit was availed in the original DTA unit was segregated as part of the two EOUs, as above. Even though there was no removal of capital goods from the original DTA factory, the demand to the tune of over ₹ 1 crore was confirmed in the impugned order towards reversal of Cenvat credit under Rule 3 (5) of the Cenvat Credit Rules, 2004 which reads as foll .....

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converted into 100% EOU, the provisions of Rule 3 (5) of the Cenvat Credit Rules, 2004 will not be attracted. The CBEC Circular No. 77/99-Cus. dated 18/11/1999 which has been relied upon by the Adjudicating Authority is no longer relevant in as much as Cenvat credit is allowed even under the 100% EOU Scheme ; (2) They have placed reliance among others on the following decisions :- (i) Privi Organics Ltd. vs. CCE, Raigad reported in 2015 (324) E.L.T. 611 (Tri. - Mumbai) ; (ii) Sun Pharmaceutical .....

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ue. Rule 3 (5) of the Cenvat Credit Rules contemplates payment of an amount equal to the credit availed in respect of inputs and capital goods when such goods are removed as such from the factory. The thrust of the appellant s argument is that the removal contemplated in the above Rule is the physical removal, of the inputs or capital goods on which credit is taken, from the factory of the manufacturer. In the present case in as much as the inputs and capital goods were not removal physically fr .....

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lso considered CBEC Circular No. 77/99-Cus. dated 18/11/99. The operative part of the decision is as follows :- 5. We find that this issue has already been decided by this Tribunal in the case of Sandoz Pvt. Ltd. v. CCE - 2011-TIOL-673-CESTAT-MUM. = 2012 (278) E.L.T. 259 (Tri.). The said order of the Tribunal has been upheld by the Hon ble High Court of Bombay as reported in 2012-04-LCX-02-05. We also note that based upon the said judgment this Tribunal in the case of Matrix Laboratories Ltd. v. .....

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ecision of the Hon ble Bombay High Court in the case of Sandoz Pvt. Ltd., and of the Tribunal decision in the case of Watson Pharma Pvt. Ltd. (supra) confirm the above view. Accordingly, the appellant is entitled to transfer of credit lying in the books of accounts at the time of conversion from DTA to 100% EOU and therefore the impugned demands are not sustainable. Thus, the appeal is allowed with consequential relief, if any. 6. In view of the above position, we do not find any merits in the c .....

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