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2019 (6) TMI 182 - AT - Central ExciseCENVAT Credit - capital goods sold as scrap and waste - Rule 3 (5A) of the CCR, 2004 - time limitation - suppression of facts or not - HELD THAT - As per the stand of Revenue, the capital goods have been sold as scrap and waste and that is why they have invoked Rule 3(5A) of the CCR, 2004 to demand duty on transaction value. Further, perusal of the invoices on record show that the appellants have not sold capital goods as waste and scrap, in fact, the capital goods have been sold after use. Further, it has not been established by the Revenue that the appellants have availed CENVAT credit on these capital goods which needs to be reversed on its sale unless it is established that the appellants have availed CENVAT credit, the demand for reversal of CENVAT credit does not arise. Time limitation - suppression of facts or not - HELD THAT - There is no suppression on the part of the appellant with intent to evade payment of duty because the entire demand has been raised based on the documents furnished voluntarily by the appellant during the course of enquiry - extended period cannot be invoked. The impugned order is not sustainable on merit as well as on limitation - appeal allowed - decided in favor of appellant.
Issues:
- Appeal against rejection of appeal by Commissioner (Appeals) regarding demand of duty on sale of capital goods without reversing CENVAT credit. - Sustainability of demand under Rule 3(5A) of CCR, 2004 on transaction value. - Appellant's claim of sale of capital goods after use for more than 15 years. - Availability of records for availing CENVAT credit and reversal. - Time-barred nature of the demand. - Allegation of suppression of fact to evade payment of duty. Analysis: The appeal was filed against the rejection of the appellant's appeal by the Commissioner (Appeals) concerning the demand of duty on the sale of capital goods without reversing the CENVAT credit. The appellant, engaged in manufacturing Gelatin, sold capital goods like Spectrophotometer, turbine set, and fork lifts during the period 2010-11 to 2011-12 without reversing the proportionate CENVAT credit or paying the applicable Central Excise duty. The Original Authority confirmed the demand of &8377; 2,86,303/- along with interest and imposed a penalty. The appellant contended that the demand was unsustainable as the goods were sold after use for more than 15 years, and the question of reversing credit or demanding duty did not arise. The appellant also argued that the demand was time-barred and not based on suppression of facts to evade duty payment. The Revenue raised the demand under Rule 3(5A) of the CCR, 2004 on the transaction value of the capital goods based on invoices produced by the appellant. However, it was found that the goods were not sold as waste or scrap but after use. The Revenue failed to establish that the appellant had availed CENVAT credit on these goods, which needed to be reversed upon sale. The demand was deemed to be based on assumptions and presumptions. Moreover, as the goods were procured over 10 years ago, the appellant did not possess records beyond 5 years, making the demand appear time-barred. The appellant voluntarily provided documents during the audit, indicating no intent to evade duty payment. The Tribunal held that the impugned order was unsustainable on both merit and limitation grounds, ultimately allowing the appeal of the appellant. In conclusion, the Tribunal set aside the impugned order, emphasizing that the demand for duty on the sale of capital goods without reversing CENVAT credit was not sustainable. The decision was based on the lack of evidence supporting the Revenue's claims and the time-barred nature of the demand, as well as the absence of suppression of facts by the appellant.
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