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TMI Blog2013 (10) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... bid does not arise. Penalty u/s 11AC of the Central Excise Act read with Rule 15(2) of the CENVAT Credit Rules, 2004 - Held that:- The penalty was unquestionable in the case The grounds for invoking the extended period of limitation were identical to the grounds for invoking Section 11AC - where mens rea stands accepted in relation to the demand of duty, it had to be accepted by the assesse vis-vis the proposal for imposition of penalty under Section 11AC - If that be so, where the demand had not been contested on the ground of limitation - it was not open to the assessee to oppose the Section 11AC penalty. Extended Period of Limitation u/s 11A(1) of the Act - Held that:- The assesse did not choose to contest the demand on the ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at it was also admitted that they had availed CENVAT credit on the machine at the time of its purchase but had not informed the department about its shifting to the second unit, that it was also pointed out that the CENVAT credit had since been reversed and the applicable interest paid at the instance of the department, that a show-cause notice dt. 22/09/2009 was issued to the appellant, inter alia, for demand of the aforesaid amount of Rs.81,600/- and for appropriation of payment thereof as also for appropriation of the payment of interest thereon and also for imposition of penalty on the appellant under Section 11AC of the Central Excise Act read with Rule 15(2) of the CENVAT Credit Rules, 2004, that this show-cause notice invoked the ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it of the same amount on receipt of the capital goods back from the job worker unit. On these facts, it is argued that there was a revenue-neutral situation wherein there was no warrant to impose any penalty under Section 11AC of the Act. In this connection, the learned consultant has relied on the following decisions:- 1. Ohm Industries vs. CCE, Belgaum [2010-TIOL-986-CESTAT-BANG] 2. Zenith Machine Tools Pvt. Ltd. vs. CCE, Belgaum [2010(255) ELT 83 (Tri. Bang.)] 3. Pooja Forge Ltd. vs. CCE [2006(196) ELT 18(Tri.)] It is further pointed out that an appeal filed by the department against the Tribunal s decision in the case of Pooja Forge Ltd. (supra) was dismissed by the Hon ble High Court of Punjab Haryana vide 2008(229) ELT 46 (P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consultant for the appellant. It is also pointed out that there is no evidence on record to indicate return of the capital goods to the appellant-unit. In the circumstances, the plea of revenue-neutrality is not sustainable. 4. I have given careful consideration to the submissions. It is not in dispute that the capital goods on which CENVAT credit had been availed was shifted to another unit without reversal of the credit. The show-cause notice, therefore, invoked Rule 3(5) of the CENVAT Credit Rules, 2004 and rightly so. Nowhere in their reply to the show-cause notice did they contest the applicability of Rule 3(5) or invoke Rule 4(5) or any other rule. As a matter of fact, the appellant chose to contest only the penal proposal in relati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his issue, certain decisions have been cited by the learned consultant. In the case of Ohm Industries (supra), certain capital goods on which CENVAT credit had been availed were shifted from one unit to another unit by the assessee. In that case, it was an admitted fact that the entire goods manufactured and cleared by the second unit was received by the first unit. In that situation, it was held that the credit of the duty paid on the capital goods was not liable to be denied to the assessee. In the present case, on the other hand, the Managing Partner of the appellant clearly stated under Section 14 of the Central Excise Act that the casting machine had been shifted to the second unit for want of space in the factory. Though the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd support to the argument that there would be a revenue neutrality and the reversal of CENVAT credit would be revenue neutral as the appellant is entitled to take credit on such amount as soon as he receives the capital goods back from the job worker s premises. This being the case, I do not find any reason for reversal of the CENVAT credit on the capital goods which were found in the factory premises of the job worker On the other hand, in the instant case, it was not the case of the assessee before the adjudicating authority that they were working under Rule 4(5)(a) and the said authority had no occasion to consider any plea of job work or one of revenue neutrality. The full text of the Tribunal s decision in the case of Pooja Forge Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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