TMI Blog2019 (1) TMI 1380X X X X Extracts X X X X X X X X Extracts X X X X ..... d have the effect of reversal of entire cenvat credit availed had the appellant not shown him as job worker, but while the mould and dies were with the job worker, appellant sold it to M/s. General Motors with adequate payment of VAT. Going by the definition of sale as found in the Central Excise Act under section 2(h), sale means any transfer of the possession of goods by one person to another in the ordinary course of trade or business for cash or deferred payment or other valuable consideration. Such a transfer with physical delivery of possession was not made but appellant had earned profit on sale of such mould and dyes in the guise of recovering the cost from General Motors. Considering the fact that such an exercise was carried out by the appellant is in exercise of erroneous legal interpretation of the provisions of the Cenvat Credit Rules 2004 and credit was availed by reflecting the same in the cenvat credit accounts, no mala fide can be attributed to the appellant so as to call for imposition of any penalty. Accordingly while upholding the demand along with interest, the penalty is set aside - appellant is liable to pay balance duty amount of ₹ 6,04,090/-/- alo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since the same transaction amounts to sale of goods. Therefore, the appellant was liable to discharge excise duty of ₹ 19,98,200/- as the assessable value at which the dies and moulds was sold was ₹ 1,94,00,000/-. It was put to show-cause, reply was furnished denying the allegation, the matter was adjudicated by Asst. Commissioner, Central Excise North Division and vide Adjudication order no. 8/Adj/NSD/CX/16-17 dated 30.03.2017 equivalent cenvat credit availed to the tune of ₹ 18,58,737/- along with interest with effect from 19.12.2011 and penalty of equivalent duty amount has been imposed on the appellant. 3. Being aggrieved with the outcome of order-in-original, appellant preferred appeal before the Commissioner (Appeals) Pune who modified the OIO by confirming applicable rate of interest with effect from 26.02.2015 on differential amount as audit had based its finding on the inspection of records. Further after the audit report and before show-cause notice dated 09.09.2016 appellant had reversed the cenvat credit to the extent of ₹ 9,30,197/- as per calculation under Rule 3(5)(a) of the Cenvat Credit Rules 2004 basing depreciated value of the moulds a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner (Appeals) is liable to be set aside. 5. In response to such submissions, learned AR Shri D.S. Chavan, supported the reasoning and rationality found in the order of Commissioner (Appeals) and brought attention of this Court to the fact recorded in the said order that during personal hearing, appellant had withdrawn its stand taken in respect of duty liability and stated that since they have discharged the said liability they only request for waiver of penalty but before this Tribunal, they contested on the maintainability of OIA also on its merit concerning duty liability. He further pointed out that the Commissioner had given his clear finding that ownership of the goods lies with some other person and therefore credit of ₹ 18,58,737/- had to be reversed as per Rule 3(5) of Cenvat Credit Rules 2004 and since such evasion of duty was detected only after departmental audit that justify extension of duty liability which won t have come to the notice due to suppression of the same by the appellant for which interference by the Tribunal in the order of Commissioner (Appeals) is uncalled for. 6. Heard from both sides at length and perused relevant provisions of law and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... like, and parts thereof falling under heading 6804] of the First Schedule to the Excise Tariff Act, are in the possession of the manufacturer of final products, or provider of output service in such subsequent years. Illustration. - A manufacturer received machinery on the 16th day of April, 2002 in his factory. CENVAT of two lakh rupees is paid on this machinery. The manufacturer can take credit up to a maximum of one lakh rupees in the financial year 2002-2003, and the balance in subsequent years. 7. Rule 4(5) reads as (5) (a) The CENVAT credit shall be allowed even if any inputs or capital goods as such or after being partially processed are sent to a job worker for further processing, testing, repairing, re-conditioning or for the manufacture of intermediate goods necessary for the manufacture of final products or any other purpose, and it is established from the records, challans or memos or any other document produced by the manufacturer or the provider of output service taking the CENVAT credit that the goods are received back in the factory within one hundred and eighty days of their being sent to a job worker and if the inputs or the capital goods are not receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve the effect of reversal of entire cenvat credit availed had the appellant not shown him as job worker, but while the mould and dies were with the job worker, appellant sold it to M/s. General Motors with adequate payment of VAT. Going by the definition of sale as found in the Central Excise Act under section 2(h), sale means any transfer of the possession of goods by one person to another in the ordinary course of trade or business for cash or deferred payment or other valuable consideration. Such a transfer with physical delivery of possession was not made but appellant had earned profit on sale of such mould and dyes in the guise of recovering the cost from General Motors. This being the factual position, going by the provision of sale of goods act, such sale after receipt of amount can only be completed with symbolic delivery of possession and in the case in hand, there is no such reference to such delivery of possession. Apparently because of that, in the OIO and OIA such transaction was held to be deemed removal. However, having regard to the fact that when sale was done through invoice, the articles were not in possession of the appellant. Further, after the appellant had r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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