9911796707
TMI Blog2013 (10) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... ut reversing the credit, that this fact was not disclosed to the department until the officers thereof visited the factory and detected the fact on 27/09/2008, that eventually the appellant paid the credit amount of Rs.81,600/- on 24/10/2008, that they also paid interest thereon amounting to Rs.3,953/- in terms of Section 11AB of the Central Excise Act on the same date, that in a statement dt. 17/02/2009, the Managing Partner of the appellant-firm admitted that the machine had been shifted to their second unit for carrying out certain casting on ingots as they did not have sufficient space to install the machine in their unit, that it was also admitted that they had availed CENVAT credit on the machine at the time of its purchase but had no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notice was based on Rule 3(5) of the CENVAT Credit Rules, 2004 and that the provision actually applicable to this case is Rule 4(5)(a). It is submitted that the machine in question was transferred to another unit of the appellant to be used by that unit as job worker for casting certain machines for the appellant. The capital goods so transferred to the other unit was intended to be returned to the appellant after the job work. On these facts, Rule 4(5)(a) was applicable. Had the appellant reversed the CENVAT credit on the capital goods at the time of its transfer to the other unit, they would have been entitled to take recredit of the same amount on receipt of the capital goods back from the job worker unit. On these facts, it is argued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arly admitted that the casting machine (capital goods) had been shifted to the other unit for want of sufficient space in the appellant-unit. The Managing Partner also admitted that the shifting of the machine from the appellant-unit had not been disclosed to the department. He also admitted that the CENVAT credit amount and interest thereon were paid only when pointed out by the officers of the department. In such circumstances, according to the Additional Commissioner(AR), the appellant cannot claim exemption from payment of Section 11AC penalty. An endeavour has also made to distinguish the case law cited by the learned consultant for the appellant. It is also pointed out that there is no evidence on record to indicate return of the capi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant at the instance of the department indicates that the appellant did not have any intent to avail undue benefit. In such circumstances, it is argued that the Section 11AC penalty is liable to be set aside. 5. I have already noted that an amount equal to the CENVAT credit availed and utilized by the assessee was voluntarily paid up by them and also interest thereon was paid under Section 11AB of the Act. No issue survives in regard to the CENVAT credit or interest thereon. The question to be considered is whether, on the facts of this case, the Section 11AC penalty imposed on the assessee is sustainable or not. On this issue, certain decisions have been cited by the learned consultant. In the case of Ohm Industries (supra), certain ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts. I find that the provisions of Rule 4(5)(a) very clearly envisages eligibility to CENVAT credit on the inputs or capital goods which are sent to a job worker. The only condition in Rule 4(5)(a) is that the said goods has to be received back within 180 days of that being sent to job worker and this condition not complied with, then assessee shall reverse an amount equivalent to the CENVAT credit taken and can take the CENVAT credit when the capital goods are received back in the factory or the job worker's premises. I find that there is no dispute that the said capital goods are utilized by the job worker, it would lend support to the argument that there would be a revenue neutrality and the reversal of CENVAT credit would be revenue neu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uppression of facts with intent to avail undue CENVAT credit. The assessee did not choose to contest the demand on the ground of limitation, thereby virtually accepting the allegation of suppression. Their only grievance is against the penalty. The grounds for invoking the extended period of limitation are, indisputably, identical to the grounds for invoking Section 11AC. If that be so, where the demand has not been contested on the ground of limitation, it is not open to the assessee to oppose the Section 11AC penalty. In other words, where mens rea stands accepted in relation to the demand of duty, it has to be accepted by the assessee vis-vis the proposal for imposition of penalty under Section 11AC. In the result, the penalty is unquest ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
