AI Drafter 
TaxTMI 
TaxTMI 
2017 (11) TMI 763
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....tro yarn Ltd. (SKPYL) (now known as M/s Eskay Knit India Ltd.) for recovery of irregular availment of Modvat Credit on capital goods amounting to Rs. 38,52,942/- with interest and proposal for penalty alleging that on the date of visit of their factory by the Central Excise officers, on 03.02.1999, the installed capital goods were not available in their factory, but were found in the premises of M/s Shri Krishna Polyester Ltd. (SKPL) (now known as M/s Krishna LifeStyle Technologies Ltd.), another registered unit of the group company, without knowledge of the department. Alos, it was proposed for confiscation of the capital goods found in the premises of M/s SKPL, personal penalty on the Director and employee of M/s SKYPL. On adjudication th....
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.... demand notice issued on 02.07.1999 for the Modvat Credit availed during the period 1994 to 1995, hence it is barred by limitation inasmuch as all facts are disclosed to the department and, therefore, larger period of limitation cannot be invoked against the appellant. It is his further contention that confiscation of the capital goods on which duty has been duly discharged cannot be sustained; also confiscation of plant and machinery of the appellant M/s SKPL unsustainable in law. It is his contention that under a bonafide belief that transfer of capital goods from one unit to another unit belonging to the same group would not require any reversal of credit being a revenue neutral situation, therefore, demand as well as penalty on the appe....
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....General Manager of the Unit Sh. Madan Lal Gupta in his statement dated 03.02.1999 and also during the course of panchnama. He has further submitted that even though in his statement, Sh. Pravin Tayal, Chairman of both the units claimed that the capital goods installed in SKPYL were removed in 1998-1999 to another unit i.e. M/s SKPL, for repairing, however could not produce any evidence of its removal and the details of repairing undertaken at M/s SKPL. On the contrary it was noticed during the course of panchanma that these capital goods were duly installed on solid foundations in the premises of M/s SKPL, andused in the manufacture of finished goods in the premises of the said unit of M/s SKPL. It is his contention that therefore the credi....
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....d from the factory and installed in the premises of M/s SKPL, without any intimation to the department. Even though, in the subsequent statement of the Director Shri. Tayal, it has been stated that those capital goods were removed from the factory to be installed for repairing purpose at M/s SKPL, however, no corroborative evidence was placed to substantiate the claim furnishing the details of repairing to be carried out and the difficulty of its repairing in the premises of the appellant M/s SKPYL. Therefore, the plea of the appellant that it were cleared for repairing cannot be acceptable. They have also wrongly availed inadmissible credit of Rs. 5,96,711/- on capital goods exclusively used in the manufacture of exempted products. The Ld.....
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....capital goods been installed in the unit of the appellants, they must have incurred installation charges and other charges for erection and commissioning of the same and which could have been produced as an evidence. The appellants have produced no such evidence. There is also no transfer memo, voucher, delivery memo etc showing transfer of the same after three or four years. There is, thus, no evidence that the same were installed/ used by the appellants and were transferred to M/s SKPL after 3-4 years as submitted by the appellants and accordingly above submissions are rejected. The appellants have also argued on limitation. In this respect also the appellants have provided no evidence to show that the receipt of the said goods was known ....
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....en the illicit credit but also used the same. The average balance therein comes to around Rs. 11 lacs which falls far short of the demand of duty of Rs. 38,52 lacs and this is the reason why the credit was taken by the appellants wihtout installing the capital goods in question." No contrary evidence has been placed by the appellant to rebut the said finding in their present Appeals before this forum. 8. The appellant had claimed that the demand is barred by limitation in as much as as the credit had been correctly availed by them on capital goods after its receipt, and installation of the same in their factory premises; that they have been filing returns from time to time with the department. I find that the Chief General Manager Shr....