TaxTMI 
TaxTMI 
2017 (12) TMI 29
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....appellant is service provider of telecommunication service. The appellant procured optical cables which were to be laid down and later on, some of the optical fibre cable was not used by the appellant therefore, the same was transferred to their sister unit. The Revenue is of the view that, as the said capital goods has been transferred to their sister unit therefore, in terms of rule 3(5) of Cenvat Credit Rules, 2004 the appellant is required to reverse the Cenvat credit availed on said capital goods. Therefore, for the period 2008-09, a show cause notice dated 29.09.2014 was issued to the appellant by invoking extended period of limitation. The matter was adjudicated and it was held that appellant is required to reverse Cenvat credit. Con....
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..... On the other hand, ld. AR opposed the contention of the ld. Counsel and submits that the issue has already been decided by the Hon'ble Karnataka High Court in the case of CCE, Belgaum Vs. Associated Cement Co. Limited - 2009 (236) ELT 240 (Kar.) wherein the goods transferred to another unit, it was held by the Hon'ble High Court that in terms of Rule 3(5) of Cenvat Credit Rules, 2004, the assessee is required to reverse the Cenvat credit. He further submitted that the same view has been taken by this Tribunal in the case of J.K. Paper Mills Vs. CCE & ST., Bhubneshwar - 2014 (309) ELT 359 (Tri. Kolkata). Therefore, the impugned order has to be upheld. 6. In rebuttal to the arguments advanced by the ld. AR, ld. Counsel submits that as th....
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....r manufacture or a whatehouse etc. This contention is unsound and also does not follow from the definition of place of 'removal'. Under the definition place of removal may be a factory or any other place or premises of production or manufacture of the excisable goods etc. The Explanations to Rules 9 and 49 do not contain any definition of place of removal , but provide that excisable goods produced or manufactured in any place or premises at an intermediate stage and consumed or utilised for the manufacture of another commodity in a continuous process, shall be deemed to have been removed from such place or premises immediately before such consumption or utilisation. Clause (b) of sub-section (4) of Section 4 has defined place of re....
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....al of the capital goods from the factory of the respondent. The central point for consideration is whether the amount is required to be paid under Rule 3(4) of the Cenvat Credit Rules is to be paid by taking such capital goods as removed from the factory. Revenue relied upon the decision of the Hon'ble Karnataka High Court in which a view was taken, in the light of the erstwhile Rule 57Q of the Central Excise Rules, that such an amount would be payable even in the absence of any physical removal of capital goods. The Hon'ble High 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 ha....
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....action in terms of Sales Tax or Central Excise provision. We note that the invoices issued did not contain the details of any removal, mode of transport, rate of duty, duty payable thereon etc., as per the requirement of Rule 11 (2) of Central Excise Rules, 2002. We also note that based on these invoices no credit can be availed by any buyer as these are not in terms of Rule 9 of Cenvat Credit Rules, 2004. In view of settled legal position regarding need for physical removal of capital goods or inputs, in order to attract the provisions of Rule 3 (5) of Cenvat Credit 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....
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.... "3. As can be seen from order of the Tribunal dated 10-11-2008 impugned in this appeal, the Tribunal has disposed of the appeal holding that the goods manufactured by the assessee were being cleared to its own sister concern, who is availing the benefit of Modvat Credit. The Tribunal has further found that as such whatever duty the assessee was paying was available as credit to its own unit (sister concern) and hence the entire exercise was revenue neutral." As the goods have been transferred to their sister unit, in that circumstance, it is a Revenue neutrality situation. In that circumstance also, the appellant is not required to reverse the Cenvat credit. 9. On limitation also, I examined the issue. As there were divergent view....