2010 (7) TMI 437 - AT - Central Excise

Cenvat credit Assessee purchased factory in which a Nitration plant was situated - assessees not taken Cenvat credit on the Nitration Plant which are the goods in question, therefore, the provisions of rule 3(5) are not attracted against the assessees - no removal from the factory of the assessees in order to attract the provisions of rule 3(5) - demand and penalty are not sustainable

Summary

The Appellate Tribunal CESTAT, Chennai ruled in favor of the assessees, stating that the demand and penalty imposed under rule 3(5) of the Cenvat Credit Rules, 2004 were not applicable as the assessees did not take credit on the goods in question. The Commissioner (Appeals) accepted that there was no credit taken, and the possibility of the previous owner taking credit was not enough to impose the rule. The assessees purchased the entire factory where the goods were located, so there was no removal to trigger the rule. The impugned order was set aside, and the appeal was allowed.