2018 (4) TMI 65 - AT - Central Excise

CENVAT credit - credit availed on brass tubes as capital goods which was subsequently removed by them - Rule 3(5)(a) of the CCR 2005 - Held that - Revenue has not been able to put forth any ground to show that in case of clearance of capital goods, in respect of which the credit has been availed, to the job worker, would not attract the provisions of Rule 4(5)(a) - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Availing cenvat credit on removed brass tubes.
2. Reversal of credit or payment of duty.
3. Contention on Rule 4(5)(a) provisions.
4. Limitation on demand.
5. Confirmation of demand and penalty imposition.
6. Interpretation of Rule 3(5A) and Rule 4(5)(a) provisions.
7. Reference to Tribunal decisions.
8. Grounds for appeal by Revenue.

Analysis:
The case involved a dispute where the respondent-assessee, engaged in sugar and molasses manufacturing, availed cenvat credit on brass tubes removed to a job worker. The Revenue contended that the assessee should have reversed the credit or paid duty as per Rule 3(5)(a) of the Cenvat Credit Rules, 2005. A show cause notice was issued for a demand of ?10,79,749. The assessee argued for entitlement under Rule 4(5)(a) to clear capital goods without duty payment when received back within 180 days, asserting no limitation breach due to proper record-keeping.

The original adjudicating authority upheld the demand and penalty, but on appeal, the Commissioner found Rule 3(5A) and Rule 4(5)(a) as independent provisions. Referring to Tribunal decisions, the Commissioner ruled in favor of the assessee, highlighting the interpretation of "as such" to include used capital goods for testing, repairing, or reconditioning. The Larger Bench decision emphasized avoiding interpretations rendering any rule redundant, supporting the assessee's position.

Upon review, the Appellate Tribunal noted the Revenue's failure to justify why Rule 4(5)(a) provisions wouldn't apply to capital goods clearance to job workers. The Tribunal found the Larger Bench decision applicable to the case, rejecting the Revenue's appeal due to lack of reasoning against the Commissioner's order. Ultimately, the Tribunal upheld the Commissioner's decision, emphasizing the relevance of the Tribunal's interpretation to the present case, leading to the rejection of the Revenue's appeal.