9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (4) TMI 619 - AT - Central ExciseCenvat Credit - Job Work - Job Worker availed cenvat credit on inputs and capital goods - Held that - If the job work is considered as non-exempted and the CENVAT credit is allowed on the inputs which are used on such job work items, we do not find any valid reason to deny the CENVAT credit of Central Excise duty paid on capital goods, which were received by the appellant during the relevant period and used in the manufacturing of very same job worked goods. Larger Bench of the Tribunal in the case of Sterlite Industries (I) Ltd. (2004 (12) TMI 108 - CESTAT, MUMBAI), has categorically settled the law as to that if an assessee is functioning under Notification No. 214/86-C.E. and if the ultimate principal manufacturer is discharging Central Excise duty liability after consumption of job worked goods, it has to be held that the said notification does not exempt the goods manufactured on job work by an assessee. The demand of Central Excise duty CENVAT Credit availed by the appellant on the capital goods is liable to be set aside and we do so. - As regards the penalties imposed on the appellant as well as the individuals, we find that as bulk of the demand is being set aside on the merits of the case itself, there is no reason for visiting the appellant with penalties under any Section or Rules. - Decided in favor of assessee.
Issues Involved:
1. Demand of duty liability of Rs. 53,438/- and interest thereof. 2. Denial of CENVAT credit on capital goods. 3. Imposition of penalties on the appellant company and individuals. Issue-wise Detailed Analysis: 1. Demand of Duty Liability of Rs. 53,438/- and Interest Thereof: The appellants did not seriously contest the demand of Rs. 53,438/- due to the smallness of the amount. The court upheld the impugned order regarding this demand and confirmed that the appellant is liable for the duty and interest thereof. The penalty imposed for not discharging the duty liability during the relevant period was also upheld. 2. Denial of CENVAT Credit on Capital Goods: The appellant purchased capital goods during 1998-1999 to 2001-2002 and did not avail of CENVAT credit until their final products became dutiable on 1-4-2003. The adjudicating authority denied CENVAT credit on the grounds that the final product was exempt during the relevant period. However, the court found this reasoning flawed, noting that the appellant used the capital goods for both their own products and job work for principal manufacturers, who discharged the duty on the finished goods. The court cited the Larger Bench decision in Sterlite Industries (I) Ltd., which clarified that goods manufactured on job work basis are not exempt if the principal manufacturer discharges the duty. Thus, the court concluded that the appellant is entitled to CENVAT credit on capital goods. 3. Imposition of Penalties: Given that the bulk of the demand was set aside on merits, the court found no reason to impose penalties on the appellant or individuals under any section or rules. The penalties were therefore set aside. Conclusion: The court upheld the demand of Rs. 53,438/- and the associated interest and penalty. It set aside the denial of CENVAT credit on capital goods and the penalties imposed on the appellant and individuals. No findings were recorded on the issue of limitation as the appeals were disposed of on merits.
|
