2018 (2) TMI 135 - AT - Central Excise

CENVAT credit - capital goods - non receipt or subsequent transfer of capital goods - transfer of capital goods to nu-registered factory premises - Held that - the term factory would also mean the registered premises of a registered person and not any premises which are not registered. Consequently the entire premises on which the impugned order grant relief to the assessee fails. Rule 9 of the Central Excise Rules read with N/N. 35/2001-CE(NT) dated 26.06.2001 clearly mentioned that registration given to a person is only in respect of this specified premises. In this circumstance only the premises which are registered can be deemed to be a factory of manufacturer. Under these circumstances, removal of goods from the registered premises to un-registered premises would require reversal of CENVAT duty amount under the CENVAT Credit Rules. Thus no distinction can be made if the goods are received in the registered factory premises and cleared, or the same are not received in the factory premises at all. CENVAT credit not allowed - appeal dismissed - decided against appellant.

Summary

Issues:
1. Dispute over CENVAT credit availed on capital goods by M/s Fluid Line.
2. Demand for reversal of CENVAT credit, interest, and penalty by Revenue.
3. Interpretation of rules regarding registration of premises for availing CENVAT credit.
4. Appeal by both Revenue and M/s Fluid Line against the order.

Analysis:
1. The dispute revolved around a show-cause notice issued to M/s Fluid Line regarding CENVAT credit on duty paid for capital goods. The original Adjudicating Authority confirmed the notice, but the Commissioner (Appeals) upheld a partial demand while setting aside the penalty under Rule 15(2) of the CENVAT Credit Rules, 2004. Both Revenue and M/s Fluid Line appealed this decision.

2. M/s Fluid Line argued that they availed CENVAT credit on capital goods used in their registered factory but later transferred to an unregistered unit. The Commissioner dropped part of the demand, citing rules related to capital goods and factory definitions not requiring premises registration. The argument also highlighted procedural lapses and the inadmissibility of penalty due to the credit's admissibility.

3. Revenue contended that registration under Section 6 of the Central Excise Act, 1944, and Rule 9 of the Central Excise Rules, 2002, mandated registration of premises for availing CENVAT credit. The denial of credit was justified as the capital goods were used in unregistered premises, as per Notification No. 35/2001-CE(NT) dated 26.06.2001.

4. The judgment analyzed various rules and definitions to conclude that registration pertained to the person and specified premises. It emphasized that only registered premises could be deemed a factory for availing CENVAT credit, requiring duty reversal for goods moved to unregistered premises. Consequently, the appeal by Revenue was allowed, and M/s Fluid Line's appeal was dismissed.

This detailed analysis showcases the legal intricacies and interpretations involved in the judgment, focusing on the key issues of CENVAT credit, registration requirements, and the outcome of the appeals filed by both parties.