Cenvat credit on moulds and dies allowed for approved job-worker removal after amendment; pre-amendment use required proof
Amended Rule 57S permitted removal of moulds and dies to a job worker with jurisdictional approval, so credit could not be denied solely because the goods were removed after 21.07.1995. For the earlier regime, admissibility depended on proof that the moulds and dies were received, installed, and used in the manufacturer's factory before removal. Where the factual record on pre-amendment use was incomplete, the dispute required fresh examination on evidence with an opportunity to substantiate the claim.
Issues: (i) Whether credit on moulds and dies removed to a job worker after 21.07.1995 was admissible when permission was obtained under the amended rule; (ii) Whether the credit relating to moulds received before 21.07.1995 could be sustained without proof that they were installed and used in the factory before removal.
Issue (i): Whether credit on moulds and dies removed to a job worker after 21.07.1995 was admissible when permission was obtained under the amended rule.
Analysis: The amended scheme under Rule 57S permitted removal of moulds and dies to a job worker with the approval of the jurisdictional authority. The record showed that permission was obtained and the goods were cleared under the amended procedure. The earlier view denying credit on the basis of removal alone could not be sustained for the post-amendment period where the rule itself contemplated such removal.
Conclusion: Credit for the post-21.07.1995 removals was admissible, and the Revenue's challenge on this issue failed.
Issue (ii): Whether the credit relating to moulds received before 21.07.1995 could be sustained without proof that they were installed and used in the factory before removal.
Analysis: For the pre-amendment period, the applicable rule required use of the moulds and dies in the manufacturer's factory. The record did not clearly establish how the disputed moulds were received, installed, used, and then moved to the job worker. As the factual foundation was incomplete, the matter required fresh examination on evidence after giving the respondent an opportunity to substantiate its claim.
Conclusion: The dispute relating to the 10 moulds received before 21.07.1995 was remanded for reconsideration.
Final Conclusion: The order was upheld for the post-amendment period, while the pre-amendment dispute was sent back for fresh adjudication on evidence and after following natural justice.
Ratio Decidendi: Where the governing rule expressly permits removal of moulds and dies to a job worker on permission, credit cannot be denied solely because the goods were not used in the factory; but for the earlier regime, admissibility depends on proof of use in the manufacturer's factory and the underlying facts must be established before denying or allowing credit.
TaxTMI 
AI Drafter ✕
TaxTMI 
