TaxTMI Login
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →Just a moment...
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) whether Notification No. 22/2003-CE dated 31.03.2003 applied to the transfer of inputs and capital goods from the DTA unit to the EHTP unit under CT-3 so as to sustain the refund claim; (ii) whether used capital goods transferred to the EHTP unit before the amendment of 13.11.2007 attracted reversal of Cenvat credit or duty liability under Rule 3(4) of the Cenvat Credit Rules, 2002; (iii) whether the assessee was entitled to refund of the amount reversed under protest in respect of inputs removed to the EHTP unit.
Issue (i): whether Notification No. 22/2003-CE dated 31.03.2003 applied to the transfer of inputs and capital goods from the DTA unit to the EHTP unit under CT-3 so as to sustain the refund claim.
Analysis: The exemption notification covered goods brought into EOU/EHTP units subject to compliance with its conditions. The transfer in question was not a fresh procurement for the EHTP unit, but movement of duty-paid goods from the assessee's DTA unit to its EHTP unit with departmental permission under CT-3. The requirement that goods be brought directly from the factory of manufacture or warehouse was read in the context of a permitted inter-unit movement of goods already duty-paid and credit-availing in the DTA unit. The Larger Bench ruling dealing with inputs supplied as such did not control the present facts of transferred used capital goods and permitted movement to EHTP.
Conclusion: The issue is answered in favour of the assessee.
Issue (ii): whether used capital goods transferred to the EHTP unit before the amendment of 13.11.2007 attracted reversal of Cenvat credit or duty liability under Rule 3(4) of the Cenvat Credit Rules, 2002.
Analysis: Rule 3(4) applied when inputs or capital goods were removed as such. The expression "as such" was construed to mean removal without use. The capital goods here had been used in the DTA unit before being shifted to the EHTP unit. The law was amended only on 13.11.2007 to provide for reversal on removal of used capital goods, which confirmed that prior thereto no such reversal was required for used capital goods. The transfer was therefore not a removal as such and did not attract duty or credit reversal.
Conclusion: The issue is answered in favour of the assessee.
Issue (iii): whether the assessee was entitled to refund of the amount reversed under protest in respect of inputs removed to the EHTP unit.
Analysis: The inputs had been purchased for the DTA unit on payment of duty and Cenvat credit had validly been taken. Their subsequent transfer to the EHTP unit was done with permission and under the exemption framework. Since no duty or reversal liability survived on such transfer, the amount reversed under protest could not be retained by the Revenue. The assessee was therefore entitled to restitution of the amount paid.
Conclusion: The issue is answered in favour of the assessee.
Final Conclusion: The refund claim was legally sustainable and the Revenue's challenge failed on all material questions decided in the appeal.
Ratio Decidendi: Removal of used capital goods after prior use is not removal "as such" for purposes of Cenvat credit reversal, and a permitted transfer of duty-paid goods to an EHTP unit under the exemption notification does not defeat refund entitlement merely because the goods did not originate directly from the factory or warehouse for that unit.
TaxTMI 
TaxTMI 
