2017 (3) TMI 1136 - AT - Central Excise

CENVAT credit - capital goods shifted and relocated in another floor of same premises - whether the appellant are eligible to the cenvat Credit on Capital Goods installed during 2001 to 2009 in their factory premises? - Held that - the appellant could be able to show and establish that all the capital goods were installed and used in the manufacture of finished goods. Merely because they could not produce the revised ground plan at the time of visit by the audit cannot lead to an inference that these capital goods were removed from the factory and not available - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Eligibility of cenvat credit on Capital Goods installed during 2001 to 2009.
- Shifting of machinery to an additional premises.
- Failure to produce relevant documents during audit.
- Discrepancy in the location of Capital Goods.
- Re-quantification of demand by the Adjudicating Authority.

Eligibility of Cenvat Credit on Capital Goods:
The appeal addressed the issue of whether the appellants were entitled to cenvat credit on Capital Goods installed between 2001 to 2009. The appellant, engaged in manufacturing Tin Containers and Aluminium collapsible Tubes, claimed that machinery had been shifted to a first floor, with the revised ground plan submitted in 2009. Despite the inability to produce the revised ground plan during an audit in 2010, a subsequent panchnama confirmed the presence of all capital goods in both ground and first floor premises. The Tribunal found that the capital goods were available for use in manufacturing, dismissing the inference of removal based on the lack of document production during the audit.

Shifting of Machinery to Additional Premises:
The case involved the relocation of machinery from the ground floor to a first floor after intimation to the department. The revised ground plan, required upon acquiring the additional premises, was submitted later. The Tribunal noted that all capital goods were present in both locations as evidenced by a panchnama in March 2011. This relocation was crucial in establishing the availability and use of capital goods for manufacturing purposes.

Failure to Produce Relevant Documents During Audit:
During an audit in December 2010, the appellant could not provide the revised ground plan, leading to doubts regarding the presence of capital goods. However, the subsequent panchnama confirmed the existence of all machinery in both ground and first floor premises. The Tribunal emphasized that the absence of documents during the audit did not imply the removal of capital goods from the factory without permission.

Discrepancy in the Location of Capital Goods:
The primary contention revolved around the discrepancy in the location of capital goods, with machinery being shifted from the ground floor to the first floor. Despite the delayed submission of the revised ground plan, the Tribunal accepted the appellant's explanation that all capital goods were available for use in manufacturing, both on the ground and first floor of the factory premises.

Re-quantification of Demand by Adjudicating Authority:
The Adjudicating Authority was directed to re-quantify the demand following the findings of the Tribunal. The appeal was allowed, setting aside the impugned order and granting consequential relief as per the law. The decision highlighted the importance of proper documentation and timely intimation of changes in premises to avoid disputes regarding the availability of capital goods for cenvat credit.