TaxTMI 
TaxTMI 
2017 (1) TMI 293
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.... and 86 of the First Schedule to the Central Excise Tariff Act, 1985. Respondent had a captive power plant, installed in the year 1982-83, which was being used for generation of steam and electricity required for manufacture of steel. Respondent had availed credit of capital goods installed in the captive power plant after 1.3.1994, when the Modvat Scheme was introduced. 3. Under a comprehensive business restructuring plan, to focus on areas of core competence and to reorganize its activities and with a view to streamline the production/power generation related activities, the Respondent transferred the ownership of their captive power plant, installed within their factory to M/s Bhilai Electric Supply Company Ltd. (BESCL), on the terms ....
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....nt payable was calculated on the basis of the value realized by the respondent from M/s BESCL. Also, suppression was alleged on the part of the respondent as it had failed to inform the sale of the captive power plant to the Department as also details of capital goods and inputs removed to M/s BESCL. 7. Respondent filed a detailed reply to the show cause notice dated 27.7.2006 stating that there was no removal of the capital goods in the captive power plant from the physical location, but there was mere change in ownership by transfer to M/s BESCL.There was no dismantling or physical shifting to any other location involved. Further, computation of demand as well as invocation of extended period of limitation was also challenged by the re....
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....s background, we have heard Shri Amresh Jain, ld.A.R. for Revenue and Shri Amit Jain, ld. Advocate for the respondent. 10. Ld. A.R. submits that in terms of Rule 3(4) of the Cenvat Credit Rules, the payment of an amount equivalent to the credit availed on capital goods is required to be made inasmuch as the power plant stands sold to M/s BESCL even though there is no physical removal of goods even after sale. He argued that the transaction was nothing short of physical removal of the capital goods. He relied upon the decision of the Hon'ble Karnataka High Court in the case of Commissioner of Central Excise, Belgaum vs. Associated Cement Co. Ltd. 2009 (236) ELT 240 (Kar.). He emphasized that the decision of the Hon'ble High Court was in s....
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....gh Court held that the transaction of sale of the entire power plant to different entity is nothing short of physical removal. However, the respondent has relied upon several case laws in which contra view has been taken. Ld. Counsel has relied on the decision of the Hon'ble Supreme Court in J.K. Cotton Spinning and Weaving Mills Ltd. vs. UOI 1987 (32) ELT 234 (SC) wherein the meaning of the word removal has been examined. The Apex Court held as follows: There can be no doubt that the word removal contemplates shifting of a thing from one place to another. In other words, it contemplates physical movement of goods from one place to another. In the Tribunal decision in the case of L.G. Balakrishnan and Bros. Ltd. (supra), the Tribunal has....
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....it Rules, 2004, we find that there is no justification to invoke such provision to demand and recover any amount from the appellant in this case. As such, we find no justification for the confirmation of demand towards capital goods. The same reasoning is applicable to the recovery of amount for the inputs amounting to Rs. 91,76,449/-. The demand towards such recovery is also not sustainable. There is no allegation or finding regarding any irregular credit availed on inputs or capital goods or usage of these goods for other than approved purposes. 13. We also note that the Tribunal has taken similar view in all the cases cited by the respondent.The Tribunal decision cited in the case of Steel Authority of India Ltd. 2007 (219) ELT 960 (T....