2018 (5) TMI 468

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ed to the job workers without payment of duty. The show cause notice dated 17.09.2007 was issued to the appellant for demand of duty by invoking the extended period of limitation on the clearance of dies to the job workers during the period 2002 to March, 2007. The matter was adjudicated, the demand of duty along with interest was confirmed, penalty of equivalent was imposed and also redemption fine imposed on the appellant for seized dies at the end of job workers. Aggrieved from the said order, the appellant is before us. 3. Ld. Counsel for the appellant submits that it is case of Revenue neutrality as whatever duty they had paid on the dies, immediately they were entitled to the take Cenvat credit of the same. If that is the situation, in that circumstance, as per Rule 4 (5)(b) of Cenvat Credit Rules, 2004, they can clear the goods to the job workers and are entitled to take Cenvat credit. Further, as per the said Rule there is no requirement of return of these dies by the job workers to the appellant. In that circumstance, the demand is not sustainable and consequently, the redemption fine and penalty is not imposable on the appellant. To support her contention, she has reli....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....actory at Noida. However, it is to be noted that this transfer is as a part of closing down of the appellant's factory and shifting of the entire factory (along with the moulds) to their own unit at Noida. The question to be answered is whether such transfer of the mould violates the condition in the Notification No.67/95-C.E., dated 16-3-1995 to the effect that the moulds used within the factory of manufacture. We are of the view that the condition specified in the notification is not violated inasmuch as the factory itself has moved to Noida and since the moulds in question continues to be used within the factory it cannot be said that the moulds have been cleared out of the factory. The fact also remains that in case duty is paid on the moulds on its transfer to Noida, such duty will be available as cenvat credit to the recipient factory. Inasmuch as the original and the destination factory belong to the same manufacturer and in fact since the former merged with the later, the whole exercise will lead to the revenue neutral situation and useful purpose will be served by charging duty for such clearances. Such a demand therefore needs to be set aside." 8. Further, we find ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....o ensure the same result. The demand in the present case is admittedly available as credit to the appellant and the same would have added in more scriptory work to the assessee, instead of resulting in any revenue earning to the Department or revenue loss to the assessees. The entire situation being revenue neutral, we find no justification for confirmation of demands in question on this ground. 10. In view of above analysis, we hold that it is case of Revenue neutrality as whatever duty they had paid on the dies, immediately they were entitled to the take Cenvat credit of the same. If that being the situation, in that circumstance, as per Rule 4 (5) (b) of the Rules Cenvat credit has been taken by the appellant on these dies, the appellant is not required to reverse the credit as the same are cleared to the job workers for further manufacture of the goods. In that circumstance, it is a case of Revenue neutrality therefore, the provisions of Rule 4(5) (b) of Cenvat Credit Rules are applicable in this case. In these circumstances, the demand confirmed against the appellant is not sustainable. Further as per Rule 4(5) (b) there is no requirement of return back of the dies to the a....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....he assessee. Since the assessee is in appeal and if the exercise is Revenue neutral, then there was no need even to file the appeal. Be that as it may, if that is so, it is always open to the assessee to claim such a credit","  36. We, thus, do not find any merit in this appeal and dismiss the same with cost." 14. Ld. Advocate contends that Rule 4(5) (a) or Rule 4(5) (b) of Cenvat Credit Rules 2004 are applicable in their case. Rule 4(5) ibid is reproduced below:- "5(a) The Cenvat credit shall be allowed even if any input or capital goods as such or after being partially processed are sent to a job worker for further processing, testing, repair, reconditioning or any other purpose, and it is established from the records, challans, or memos or any other documents produced by the manufacturer or provider of output service taking the Cenvat credit that the goods are received back in the factory within one hundred eighty days of their being sent to job worker and if the inputs or the capital goods are not received within one hundred eighty days, the manufacturer or provider of output service shall pay an amount equivalent to the Cenvat credit attributable to the inputs or....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....other unit at Noida. In these circumstances, it was held that such moulds continue to be used in the appellants' own factory. Again, the facts are totally different from the facts of the present case where the moulds were never captively used within the factory and have been sent to other manufacturers, who are the job workers. Hence, this judgment also does not help the appellants. (iii) The other case relied by the appellants, namely SMT Machines (India) Ltd. Vs. CCE, Chandigarh (supra), the facts are totally different and the Ld. Advocate admitted so during the hearing itself. 16. As for the extended period, the appellant have been deliberately and knowingly availing the benefit of this notification even though they are not eligible for the same; The wording of the notification is very clear and is unambiguous. No question of interpretation is involved. Since the fact of removal of above dies to their job workers, without payment of duty, was not brought to the notice of the Revenue by the appellant and it came to the notice of the Department through an intelligence after which the team of officers visited the factory on 27.12.2006 and found that the appellants were re....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....t, the appeal is dismissed. Devender Singh Member (Technical)   DIFFERENCE OF OPINION As there is divergent views of the Members of this Tribunal, therefore the matter may be placed before the Hon'ble President to appoint third Member to resolve the following issue; (a) Whether in the facts and circumstance of the case and evidences placed on record, Member (Judicial) is correct in holding there being Revenue neutral situation, in terms of Rule 4(5) (a)/(b) of Cenvat Credit Rules, 2004, the appellant is not required to reverse Cenvat credit; OR Whether, in the facts and circumstances of the case and the evidences placed on record, the Member (Technical) is correct in holding that the plea of Revenue neutrality is not tenable after irregular availment of a notification especially when credit is not available to appellant himself and the provisions of Rule 4(5) (a)/ (b) of the Rules are not applicable in this case. (Points of difference pronounced in the court on 14-12-2017 ) Devender Singh Member (Technical)   Ashok Jindal Member (Judicial)   Per: Anil G. Shakkarwar: 20.  Heard on the difference of opinion. ....