2015 (10) TMI 1987 - AT - Central Excise

CENVAT Credit - duty paid documents - CVD paid on capital goods - Job work - manufacture of exempted goods using capital goods by the Job worker - Held that - On merits itself, the demands are not sustainable. It is not under dispute that the goods were imported and CVD was paid. The respondent-assessee has produced the triplicate copy of the bill of entry at the time of taking the credit. It is only after the audit was done that the said copy was not available. We also note that installation certificate was issued by the Superintendent after visiting the factory and seeing the bill of entry etc. Under the circumstances, the view taken by the Commissioner is correct. Similarly, we find that no case has been made by the Revenue that the respondent has used the machine exclusively for the manufacture of exempted goods. The respondent was manufacturing the goods on job work basis, which were not exempt but were dutiable and duty was paid by their customer. In any case, we find that the said machines were removed from their Aurangabad plant on reversal of the entire amount of the cenvat credit taken on the capital goods and in view of the fact that the entire amount of cenvat credit was reversed only later on, nothing survives in the matter - Decided against Revenue.

Summary

Issues:
1. Admissibility of cenvat credit without triplicate copy of the bill of entry.
2. Availment of Modvat credit on capital goods exclusively used for job work basis.

Analysis:

Issue 1: Admissibility of cenvat credit without triplicate copy of the bill of entry
The appeal was filed by Revenue against the order passed by the Commissioner concerning the admissibility of cenvat credit by the respondent-assessee. The Revenue contended that the respondent failed to produce the triplicate copy of the bill of entry, which is essential for claiming cenvat credit. However, the respondent argued that they had the triplicate copy but it was misplaced, and they provided an attested copy from the Custom House. The Commissioner found that there was no evidence to suggest that the triplicate copy was not available when the credit was taken. The installation certificate was also issued after verifying the documents, making the demand unsustainable. The Tribunal upheld the Commissioner's decision, stating that the demands were not sustainable as the goods were imported, the triplicate copy was produced initially, and no suppression of facts was evident.

Issue 2: Availment of Modvat credit on capital goods used for job work basis
The second ground of appeal concerned the availment of Modvat credit on capital goods exclusively used for manufacturing goods on a job work basis. The Commissioner referred to Rule 57R of the C.Ex. Rules 1944, which prohibits credit on capital goods used exclusively for exempted or nil-rated goods. The respondent had declared that the capital goods would not be exclusively used for such purposes. The Tribunal noted that the respondent only did job work for others without clearing goods on payment of duty. As per the RT-12 returns, the intention to evade duty was not manifested. The Tribunal concluded that the extended period under Section 11A(1) proviso was not applicable, and the demand was not sustainable. The Tribunal found that the demands were not sustainable on merits, as the machines were not used exclusively for exempted goods, and the entire cenvat credit was reversed upon shifting the machines to another unit.

In summary, the Tribunal dismissed the appeal filed by Revenue, upholding the Commissioner's decision on both issues regarding the admissibility of cenvat credit without the triplicate copy of the bill of entry and the availment of Modvat credit on capital goods used for job work basis.