2017 (4) TMI 379

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....e to pay excise duty on such removal. Accordingly, the demand and consequential penalty were confirmed by the adjudicating authority. Being aggrieved by that Order-in-Original the appellant filed appeal before the Commissioner (Appeals) which was rejected, upholding the Order-in-Original. 2. Shri S. Narayanan, ld. counsel for the appellant submits that subject capital goods were first received by the appellant, installed and used in the manufacture of final product and after use, the same were cleared under cover of challan under Rule 4(5)(a) of Cenvat Credit Rules, 2004 to their own other unit. As per Rule 3(5) the duty is required to be paid only in respect of those capital goods, which were cleared as such. In this case, the capital g....

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....impugned order. He further submits that appellant removed the capital goods out of their factory. Therefore in terms of Rule 3(5) they are required to pay the duty equivalent to the cenvat credit availed on the capital goods. He submits that the Rule itself provided for payment of duty and if the duty cannot be recovered by the said provision then the provision stands redundant which is not the intention of the Rule 3(5). He placed reliance on the following judgment:- • CCE vs. Merino Industries Ltd. 2014 (309) ELT 379 (Tri-Del) • Fiat India Pvt. Ltd. 2006 (198) ELT 438 (Tri-Mum) 4. I have carefully considered the submission made by both sides. I find that firstly, the capital goods removal by the appellant were....

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.....2013 whereas the period involved in the present case is June 2003 to May 2006. During this period no similar provision was existing, in other words, at the material time, no provision existed for recovery of cenvat credit in case the assessee fails to pay the excise duty on removal of capital goods. In the present case, the appellant have admittedly paid duty along with interest before issuance of show-cause notice. The prayer of the appellant is reproduced below:- "The impugned OIA confirming penalty of Rs. 11,41,292/- under Rule 11AC of Central Excise Act, 1944 read with Rule 15 of CCR 2004 and also demanding interest of Rs. 1,61,217/- under Section 11AB of Central Excise Act, 1944 r/w Rule 14 of CCR 2004, may be set aside." ....