2012 (1) TMI 106

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.... Oil Coolers during the period from July to November, 2005. The job worker cleared the job-worked goods (Oil Coolers) to the appellant on payment of duty by including the value of the raw material also in the assessable value. CENVAT credit of the duty so paid by the job worker was availed by the appellant. The show-cause notice in this case was issued on the basis of an Audit Note dated 16-12-2005, wherein it was noted that the appellant had not reversed credit of the duty paid on the material (tubes) when it was cleared to the job worker; that they ought to have reversed the credit; that when this was pointed out to them, they raised objections and proposed to contest on the issue. As per the Audit Note, the credit was recoverable with in....

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....l situation would have emerged if the appellant had reversed CENVAT credit on the tubes at the time of clearance of the goods to the job worker and if the latter had taken credit thereof. It is argued that the demand in such a revenue-neutral situation would be unsustainable. In this connection also, case law has been cited viz. Goa Industrial Products v. Commissioner - 2005 (181) E.L.T. 222 (Tri.-Mumbai). 4. The relevant fact that the tubes had been supplied to the job worker without reversal of CENVAT credit was gathered by the internal auditors of the department, as early as in December, 2005. However, the show-cause notice for recovery of the credit came to be issued only in April, 2008, far beyond the normal period of limitatio....

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.... product. A case of removal of input or capital goods to a job worker for further processing, testing, repair, re-conditioning or any other purpose is governed by Rule 4(5)(a) of the CENVAT Credit Rules, 2004. This provision requires the job worker to return the job-worked goods to the principal manufacturer of final products within a specified period. If the job-worked goods are not received back in the factory of the manufacturer of final product within such period, the manufacturer of final product shall pay an amount equivalent to the CENVAT credit attributable to the input or capital goods, by debiting the amount in the CENVAT account or otherwise. Rule 4(5)(a) allows CENVAT credit on the input to be taken by the manufacturer of final ....