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TMI Blog2020 (2) TMI 1254X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice for up to 620 days without corresponding reversal of the credit availed on procurement of such. It would appear from the records that 'set-top boxes' and 'control instrument' were supplied by appellant to enable the reception of signals at the site of the recipient. The appellant is a provider of 'broadcasting service' and, in that capacity, enters into agreement with customers who are provided with the 'consumer premise equipment' and it would appear that, between 2009-10 and 2013-14, 17,59,504 customers disconnected the service despite which the equipment was allowed to remain at their premises leading to availment of ineligible CENVAT credit to the extent of Rs.39,17,72,895/-. Furthermore, another Rs. 83,84,193/- constituted ineligible availment as the said equipment had been written-off in the books of the assessee. On conclusion of the proceedings, the adjudicating authority confirmed a total demand of Rs.40,63,50,355/-, along with interest thereon, besides imposing penalties of like amount under rule 15 of CENVAT Credit Rules, 2004. 2. According to Learned Counsel for the appellant, the proceedings were superfluous insofar as the demand pertaining to written-off equipm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facturer. If we are to accept the contention of the revenue, then these words will have to be substituted by the words "have been sold" which would then possibly have reference to the buyer's premises.' Learned Counsel contends that 'place of removal' has a particular connotation. It is also contended that the Hon'ble Supreme Court in State of Haryana v. Dalmia Dadri Cement Ltd [2004 (178) ELT 13 (SC)], by holding that '10. We are unable to accept the submission of Mr. Bana that, in order to get the exemption it must be shown that the goods in question, namely, the cement supplied by the assessee in this case was actually used in the generation or distribution of electrical energy. It must be noted that the important words used in the relevant provisions are goods for use by it in the generation or distribution of such energy (emphasis supplied by us). On a plain reading of the relevant clause it is clear that the expression "for use" must mean "intended for use". If the intention of the legislature was to limit the exemption only to such goods sold as were actually used by the undertaking in the generation and distribution of electrical energy, the phraseology used in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd has been cited as supportive of their contention. Furthermore, reliance is placed on the decisions in Commissioner of Central Excise, Indore v. Surya Roshni Limited [2003 (155) ELT 481 (Tri.Del.)], Commissioner of Central Excise & Customs v. Biopack India Corporation Ltd. [2010 (258) ELT 56 (Guj.)], Hindustan Corporation Ltd v. Commissioner of Central Excise [2014 (314) ELT 672 (Tri.Bang.)] as well as Commissioner of Income Tax v. Bharat Bijlee Ltd [(2014) 365 ITR 258)] and Ishikawajima Harinia Heavy Industries Ltd. v. Director of Income Tax, Mumbai [2007 (3) SCC 481]. 4. According to Learned Special Counsel appearing for respondent, the adjudicating authority has clearly laid down the framework of the dispute as agitated by the appellant and has responded to each of these cogently. Contending that it is an admitted fact that the said capital goods were taken to the premises of the customers and never returned, he submits that the rendering of service that is not taxable does not suffice to entitle the appellant to CENVAT credit and that capital goods are entitled to credit only if used in providing output services for which reliance is placed on rule 6(4) of CENVAT Credit Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat a commercial entity would not be procuring capital goods that it does not intended to utilize. On the other hand, under the generic provisions, credit that has been wrongly utilized is liable to be recovered. It is between these two that Revenue seeks to situate the appellant for enforcing its proposal to recover credit. That the appellant was a provider of output service at the time of procurement of the capital goods is not in doubt. Neither is there any question that the said goods do not conform to the definition in rule 2(a) of CENVAT Credit Rules, 2004 at the time of its receipt at the premises of the appellant. It is not in challenge that the provider of output service is unable to deploy the capital goods at any other premises for providing output service and, hence, removal to the premises of the customer does not constitute a disqualification for availment of credit. 7. We are not required to pursue the submissions of the appellant that the expression 'place of removal' or 'use' are relevant for determination of continued eligibility. The case of Revenue rests upon removal of equipment from the premises of the provider which, from a certain point in time, ceased to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appropriate rate of duty in the event of transformation as 'waste and scrap'. The discharge of the respective liabilities, under these varying circumstance, is contingent upon obligation to clear the capital goods against invoice as envisaged in rule 9 of CENVAT Credit Rules, 2004. Furthermore, as per '3. CENVAT Credit. (1) xxxxxx (6) The amount paid under sub-rule (5) and sub-rule (5A) shall be eligible as CENVAT credit as if it was a duty paid by the person who removed such goods under sub-rule (5) and sub-rule (5A). the deeming of the said payment to be 'duty' paid is an unambiguous indicator that the object of this provision is not to restrict the credit but to enable the recipient of such goods to be entitled to CENVAT credit. Consequently, it is only upon the transfer of possession to another manufacturer/provider of output service that credit originally availed can be curtailed and for the facilitation of availment by the successor manufacturer/provider of output services. In these circumstances, and in the absence of any specific statutory provision requiring such reversal along with absence of further availment of credit by any other assessee, we are constrained ..... X X X X Extracts X X X X X X X X Extracts X X X X
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