2007 (7) TMI 523 - AT - Central Excise

Cenvat/Modvat - Capital goods - Transfer of ownership - Held that - there was deemed removal from the premises of the appellant consequent to issue of commercial invoice, and it was proper to deem that the moulds have been received back in the appellant s factory for the intended purpose. It is to be noted that if the moulds were received by the buyers and physically retuned to the appellant, the credit was available - appeal allowed.

Summary

Issues:
1. Ownership of moulds and its impact on availing credit.
2. Deemed removal of goods based on commercial invoice issuance.

Ownership of Moulds and Availing Credit:
The case involved the manufacturing of moulds transferred to another unit based on stock invoice, with commercial invoices raised but the physical transfer not occurring. The Commissioner held that as the moulds were not physically delivered to the buyers, the appellant, being the owner, could not avail credit. However, the Tribunal noted that despite ownership, the moulds were used as capital goods for manufacturing components on which duty was paid upon clearance. The Tribunal emphasized that the moulds being utilized for intended purposes justified the appellant's credit claim. The Tribunal referenced previous decisions supporting the irrelevance of ownership in such cases, ultimately allowing the appeal and granting consequential relief.

Deemed Removal of Goods and Commercial Invoice Issuance:
The Commissioner deemed the moulds to have been removed from the appellant's premises upon commercial invoice issuance, leading to the conclusion that the moulds were received back in the factory for manufacturing purposes. The Tribunal acknowledged this deemed removal but highlighted that if the moulds had been physically returned by the buyers, credit would have been available. By considering the use of moulds for manufacturing components and the duty paid on clearances, the Tribunal supported the appellant's position, emphasizing the significance of the intended purpose of the goods. Consequently, the Tribunal allowed the appeal, providing relief to the appellant based on the circumstances presented and the legal precedents referenced during the proceedings.