2011 (4) TMI 1046 - AT - Central Excise

CE registration - refusal by the department to give a combined central excise registration for two units of the appellants separated by a road Held that - two factories at Premises-I and Premises-II satisfy the parameters at (2), (4), (5), (6) and (7) specified by C.B.E.C. as reproduced, appellant falls within the norms prescribed by C.B.E.C. for granting common registration for two premises separated by a public road and there is no merit on the order of the Commissioner and it deserves to be set aside and the request of the appellant for common registration is to be granted Removal of capital goods from one premises of the appellant registered as his factory to the another premises across the road sought to be registered together with the first premises for which registration, permission is denied by the department - appellant submits that equipment were being shifted to appellant s own premises for own manufacturing activities the appellant was under the impression that there was no requirement to reverse Cenvat credit taken when such goods were received into their factory at Premises-I. Appellant submits that there was no undue advantage accruing to them and they had no intention to evade any duty Held that - no intention to evade payment of duty, because the appellant was eligible for taking a combined registration for both the premises and if such combined registration was taken there would have been no infraction of any law. In view of the order passed by us in Appeal No. 1687/2008, no short payment of duty subsists, there is no case for demand of duty with penalty under Rule 15(2) of the Cenvat Credit Rules, equal to duty supposedly evaded, appeals are allowed by setting aside the duty demand and penalty imposed, stay petition and appeals are disposed of accordingly

Summary

Issues:
1. Refusal of combined central excise registration for two units of the appellant.
2. Removal of capital goods from one premises to another without proper registration and reversal of Cenvat credit.

Issue 1: Refusal of Combined Central Excise Registration:
In the first appeal (E/1687/2008), the appellant sought combined central excise registration for two units separated by a public road. The Commissioner rejected the request based on the belief that the processes at the two premises were not interconnected. The appellant argued that the manufacturing processes were indeed interlinked, as tools and dies manufactured at one premises were essential for the manufacturing activity at the other. The appellant contended that they fell within the guidelines set by the C.B.E.C. for granting common registration for two premises separated by a public road. The Tribunal noted that the appellant satisfied several parameters specified by the C.B.E.C., such as common raw materials, labor force, administration, and sales tax registration. Consequently, the Tribunal set aside the Commissioner's order and granted the appellant's request for common registration.

Issue 2: Removal of Capital Goods Without Proper Registration:
In the second appeal (2577/2010), the appellant was penalized for removing capital goods from one registered premises to another without including the latter in their registered premises and without reversing the Cenvat credit taken on the goods. The appellant argued that the shift was due to space constraints and that they had no intention to evade duty. They believed that the procedural irregularity did not result in any loss of revenue to the department. The Tribunal acknowledged the infraction of the Cenvat Credit Rules but found no intent to evade duty. Considering the appellant's eligibility for combined registration, the Tribunal concluded that no short payment of duty existed. Therefore, the Tribunal allowed the appeals, setting aside the duty demand and penalty imposed.

In conclusion, the Tribunal's judgments in both appeals favored the appellant. The first appeal resulted in the grant of combined central excise registration, while the second appeal saw the dismissal of duty demand and penalty for the improper removal of capital goods. The decisions were based on the interlinked nature of the manufacturing processes and the absence of intent to evade duty, ultimately leading to a favorable outcome for the appellant in both cases.