2004 (6) TMI 401 - AT - Central Excise

Summary

Issues:
- Availment of Cenvat credit on duty paid capital goods transferred between factory units after a lapse of time.

Analysis:
The appeal before the Appellate Tribunal CESTAT, New Delhi involved the issue of M/s. Showpla (Delhi) Ltd. seeking Cenvat credit for duty paid on capital goods transferred from their Pune factory to their Noida factory after a few years. The Appellants imported and procured machines for their Pune unit in 1998, but did not take credit for one Bill of Entry at Pune. They transferred machines to Noida in 2001, taking partial credit at Noida. The Appellants argued that the credit should not be denied as per Rule 57AE of the Central Excise Rules, 1944, and highlighted that the credit transfer was revenue neutral. They also contended that the show cause notice issued was time-barred, and penalty imposition was unwarranted due to lack of suppression of facts.

The Appellants' advocate emphasized that the credit was not originally availed at Pune, thus the denial of credit at Noida was unjustified. The Revenue, represented by the SDR, argued that once credit is taken against a Bill of Entry, the endorsed bill loses its validity as a duty-paying document. The Revenue contended that the Appellants willfully suppressed the credit availed at Pune, justifying the extended limitation period and penalty under Rule 57AH(2) of the Central Excise Act.

After considering both sides' arguments, the Tribunal found that the Appellants did not take credit for the disputed amount at Pune. The Tribunal upheld the denial of credit for machines covered under Bill of Entry No. 2615 but allowed the appeal for machines under Bills of Entry Nos. 2912 and 1576. The Tribunal noted that the Appellants' challans with duty payment references were valid documents for the capital goods transfer, and the receipt at Noida was undisputed. The Tribunal highlighted discrepancies in the Range Superintendent's report, showing that credit was not taken at Pune for the disputed amount. Thus, the Tribunal ruled in favor of the Appellants' eligibility to claim credit at their Noida unit for the machines covered under Bills of Entry Nos. 2912 and 1576. The appeal was disposed of accordingly.