TMI Blog2017 (12) TMI 316X X X X Extracts X X X X X X X X Extracts X X X X ..... ICHY [2016 (6) TMI 829 - CESTAT CHENNAI], where it was held that when there is no removal of goods under cover of invoice, as provided under rule 9, there is nothing in Rule 3 (5) to invoke the deeming fiction as insisted by the department. Appeal allowed - decided in favor of appellant. - E/85475/16 - A/90636/17/SMB - Dated:- 6-10-2017 - Mr Ramesh Nair, Member (Judicial) Shri. Rajesh Ostwal, Advocate for the Appellants Shri. H.M. Dixit, Asstt. Commissioner ( A.R.) for the Respondent ORDER The fact of the case is that appellant before January, 2010 were having Foam manufacturing division and sheet assembly division within the same company and premises. In January, 2010 new joint venture was created with 51% share of the appellant and 49% share of the F. S Ferhrer Automotive GmbH and this new Joint venture namely M/s. Harita Fehrer was created. Under this joint venture company foam division continued to manufacture foam. Before creating joint venture the appellant had availed Cenvat credit in respect of certain capital goods which were installed in their factory and used for manufacturing foam. The case of the department is that new joint venture was created ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of Rule 3(5) shall not apply. The identical facts and issue thereof has been considered by the Division bench of this Tribunal in case of L.G. Balakrishnan Bros., Ltd (Supra) wherein following order was passed: 6. The main point for decision in this appeal is the liability of the appellant to pay an amount equal to credit availed on inputs, work-in-progress and capital goods consequent on sale/transfer of Chain Division, available at the time of transfer of the said division to M/s. RCIPL. The appellant' s liability for penalty under Section 11AC is also a matter to be resolved. 7. The admitted facts of the case are that the appellant had two divisions in which the excisable goods are manufactured. The Chain Division has been transferred to a new joint venture company, which is created by the appellant with M/s. Renold International Holding Ltd., (RIHL). The new legal entity RCIPL has acquired/taken-over the Chain Division of the appellant. Consequent on such new arrangement, the appellant got their Central Excise registration suitably amended along with new area demarcation. The new entity also got Central Excise registration approved. At the time of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Division. The relevant provision of Rule 3(5) of Cenvat Credit Rules, 2004 relied upon by the original authority is reproduced as below :- (5) When inputs or capital goods, on which CENVAT credit has been taken, are removed as such from the factory, or premises of the provider of output service, the manufacturer of the final products or provider of output service, as the case may be, shall pay an amount equal to the credit availed in respect of such inputs or capital goods and such removal shall be made under the cover of an invoice referred to in rule 9 : Provided that such payment shall not be required to be made where any inputs are removed outside the premises of the provider of output service for providing the output service : Provided further that such payment shall not be required to be made when any capital goods are removed outside the premises of the provider of output service for providing the output service and the capital goods are brought back to the premises within 180 days, or such extended period not exceeding 180 days as may be permitted by the jurisdictional Deputy Commissioner of Central Excise, or Assistant Commissioner of Central Excise, as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances, the above observation of the Apex Court assumes significance and has to be followed as binding ruling. Accordingly, we are of the view that all the decisions cited by ld. Counsel in support of the assessee's contention that Rule 3(5) of the CCR, 2004 would not be invocable unless there was physical removal of capital goods/inputs are in accordance with the ruling of the Apex Court. .... ..... ..... ..... 11. We are also in agreement with ld. Counsel's proposition that a deeming provision should be express. Any quasi-judicial authority, however learned, cannot deem the existence of a deeming provision where there is none in the text of the relevant statute. The Hon ble Supreme Court's judgment rendered in Shyam Oil Cake Ltd. (supra) seems to support the assessee's case on this point. The said decision of the Tribunal was affirmed by the Hon ble Madras High Court (supra). The High Court observed that when there is no removal of goods under cover of invoice, as provided under Rule 9, there is nothing in Rule 3(5) to invoke the deeming fiction as insisted by the department. The language of Rule 3(5) is plain and simple when the inputs are capit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... buyer as these are not in terms of Rule 9 of Cenvat Credit Rules, 2004. In view of settled legal position regarding need for physical removal of capital goods or inputs, in order to attract the provisions of Rule 3(5) of Cenvat Credit Rules, 2004, we find that there is no justification to invoke such provision to demand and recover any amount from the appellant in this case. As such, we find no justification for the confirmation of demand towards capital goods. The same reasoning is applicable to the recovery of amount for the inputs amounting to ₹ 91,76,449/-. The demand towards such recovery is also not sustainable. There is no allegation or finding regarding any irregular credit availed on inputs or capital goods or usage of these goods for other than approved purposes. 11. Regarding demand of the amount equal to credit availed to LPG transferred to M/s. RCIPL by the appellant during Oct., 08 to Jun., 09, the appellant conceded that the said amount is payable by them. The said LPG was cleared to M/s. RCIPL after the new Unit coming into existence. 12. We find that the show cause notice in the present case was issued on 17-9-2009 invoking suppression, misstat ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
