2022 (3) TMI 102

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.... the time of purchase of the capital goods, the assessee availed of the CENVAT credit benefit and paid much less duty or no duty on the capital goods than the goods may otherwise have attracted. Some time down the line, the assessee was desirous of removing the relevant goods from its manufacturing unit. It is in such context that Rule 3(5) of the then CENVAT Credit Rules, 2004 becomes relevant as it provides as follows: "Rule 3. CENVAT credit - (1) ... (2) ... (5) When inputs or capital goods, on which CENVAT credit has been taken, are removed as such from the factory, or premises of the provider of output service, the manufacturer of the final products or provider of output service, as the case may be, shall pay an amount equal to t....

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....ods. It transpires that the concerned Assistant Commissioner of Excise, under a mistaken impression that the refund sought was in respect of the goods manufactured by the assessee and it did not pertain to the capital goods covered by Rule 3(5) of the CENVAT Credit Rules, 2004, made a refund to the tune of Rs. 1.58 crore. By a show-cause notice dated September 24, 2007, the assessee was required to show cause why the amount of refund to the extent of about Rs. 1.58 crore that had been erroneously made should not be paid back by the assessee to the department. Several lines of defence were taken by the assessee in response to the show cause-notice, including that Rule 3(5) of the said Rules of 2004 did not require any payment to be made b....