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2016 (9) TMI 365 - CESTAT CHENNAI

2016 (9) TMI 365 - CESTAT CHENNAI - TMI - Whether the appellant is entitled to avail cenvat credit on capital goods which were sent to their sister unit who are job worker under Rule 4(5)(a) of Cenvat Credit Rules - Capital goods was removed/cleared from the unit where the credit was availed to appellant's own unit (sister unit) within the same Commissionerate - job worked-goods returned back to appellant's factory within stipulated period prescribed and were used in the manufacture of final pro .....

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Hon'ble Punjab & Haryana High Court in the case of Commissioner Vs Pooja Forge Ltd. [2007 (11) TMI 316 - HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH] is squarely applicable to the case. Therefore, by following the same, the impugned order is set aside. - Decided in favour of assessee with consequential relief - Appeal No. E/41585/2015 - Final Order No. 41458/2016 - Dated:- 6-9-2016 - Shri P. K. Choudhary, Judicial Member Shri S. Durairaj, Advocate For the Appellant Shri L. Paneerselvam, AC (AR .....

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it was noticed that they had taken cenvat credit on capital goods but it was found that the said capital goods were not available in the appellant s unit and the same have been installed in their sister unit and, therefore, it was alleged that they had contravened the provisions of Rule 4(2), Rule 9(5) of CCR 2004 and Section 11A of Central Excise Act in as much as the appellant availed cenvat credit wrongly on the invoices of capital goods which were not installed in the registered premises, wi .....

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le 15 of CCR 2004. Upon adjudication of notice, the adjudicating authority, after due process of law, confirmed the demand of ₹ 1,56,321/- with interest and appropriated the amount of ₹ 1,56,321/- already reversed by them against the demand and levied interest besides imposing penalty of equal amount. On appeal, the learned Commissioner (Appeals) upheld the order of the adjudicating authority in the impugned order. Hence the present appeal by appellant-assessee before the Tribunal. 3 .....

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lowed for moving the capital goods to the job worker s premise which were duly sent back to the appellant s unit within the stipulated period of 180 days and were used in the process of manufacture. This fact is not disputed by the department. He submits that entire situation is revenue-neutral since the credit availed on such goods is available to Unit-IV. He also submits that imposition of penalty is not warranted as all the transactions were captured in their books of accounts, they acted und .....

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The learned A.R appearing for Revenue submitted that there is contravention of Rule 4 (2) (a) and Rule 9 (5) of CCR 2004 for which the lower authorities have correctly held that the credit is inadmissible and removal of capital goods to their sister unit was unearthed only during audit. Hence invocation of longer period is applicable. He reiterated the findings in the impugned order and prayed that appeal may be dismissed. 5. I have carefully considered the submissions of both sides and perused .....

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t is also not in dispute that the job worked-goods returned back to appellant s factory within stipulated period prescribed under Rule 4 (5) (a) of CCR 2004 and were used in the manufacture of final product and cleared on payment of duty. It is only movement of capital goods between the appellant s own units situated within the same Commissionerate for use in the manufacture of the same final product. In this factual scenario, the case laws relied upon by learned Advocate are applicable to the f .....

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al of Cenvat credit and capital goods which were found in the job workers premises. It is undisputed in this case, that the said job worker M/s. Aditya Engineering is doing job work for the appellant. It is also undisputed that the entire job worked material from M/s. Aditya Engineering comes to the appellant for use in the further manufacturing of excisable products. I find that the provisions of Rule 4(5)(a) very clearly envisages eligibility to Cenvat credit on the inputs or capital goods whi .....

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lend support to the argument that there would be a revenue neutrality and the reversal of Cenvat credit would be revenue neutral as the appellant is entitled to take credit on such amount as soon as he receives the capital goods back from the job worker s premises. This being the case, I do not find any reason for reversal of the Cenvat credit on the capital goods which were found in the factory premises of the job worker, who is undisputedly one of the group concerns of the appellant. I also fi .....

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