9911796707
TMI Blog2013 (11) TMI 980X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of which Cenvat credit had been taken, but which had been written of and not used for manufacture. The appellant under letter dated 20 March 2003 and subsequently under their letter 17th June, 2003 provided the details according to which the Cenvat credit availed material valued at Rs. 1,29,07,905/- involving Cenvat credit of Rs. 22,20,259/- was sold as obsolete parts/ waste in Rs. 15,28,213/- during August 2002 and September 2002 and material valued at Rs. 31,711/- found short due to theft, has been written of. The appellant also informed that on the material originally valued at Rs. 1,29,07,905/- and which was sold as waste/obsolete material in Rs. 15,28,213/- they have paid the duty of Rs. 2,44,515/-. The Cenvat credit involved on the goods found short due to theft was Rs. 5,074/-. The department issued a show cause notice dated 24/8/04 on the basis that in respect of the Cenvat credit availed inputs valued at Rs. 1,29,07,905/-, the Cenvat credit of Rs. 22,20,259/- originally taken should have been reversed as against the duty on transaction value of Rs. 2,44,515/-, which had been paid. Similarly, the department was also of the view that in respect of inputs valued at Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 (258) E.L.T. 97 (Tri. -Del.), wherein the Tribunal held that when NEI Ltd. was clearing Cenvat credit availed inputs to its sister concern and that sister concern were selling those inputs to other buyers at higher price, the appellant were required to pay an amount equal to the duty on the transaction value in terms of Rule 3 (4) of the Cenvat Credit Rules, 2002 in force at that time and the amount to be paid was not restricted to Cenvat credit originally taken, that the ratio of this judgment of the Tribunal is squarely applicable to the facts of this case, that in the Board's Circular No. 643/34/2002-CX. dated 01/7/2002 (Sl. No. 14) it has been clarified that where the inputs or capital goods on which the Cenvat credit had been taken are removed, as such on sale, the value is to be determined under Section 4 (1) readwith the Valuation Rules, that the Board in its subsequent Circular dated 16/06/05 has further clarified that in case the inputs or capital goods are removed, as such, the provisions of Rule 3 (5) of Cenvat Credit Rules, 2004 shall be applicable and that the situation prior to 01/3/03 when Rule 57 AB (1) (c) of Central Excise Rules, 1944/ Rule 3 (4) of Cenvat Credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... production of final product, Cenvat credit would not be available and, hence, credit originally taken should have been reversed and, as such, the provisions of Rule 3 (4) of the Cenvat Credit Rules, would not be applicable, that as regards limitation, since the appellant did not intimate the department during August 2002 and September 2002 regarding the clearance of written off inputs as waste on payment of duty on transaction value, they have suppressed the relevant fact from the department and hence extended period for recovery of Cenvat credit has been correctly applied. He, therefore, pleaded that there is no infirmity in the impugned order. 5. I have considered the submissions from both the sides and perused the records. 6. So far as the merits of the case are concerned, there is no dispute that the Cenvat credit availed components of television sets, which could not be used for manufacture, for the reason that the models for which the components were to be used, had become obsolete and were no longer being manufactured, had been cleared as such. Though the invoices mentioned these clearances as waste/scrap, the fact remains that these are the Cenvat credit availed inputs w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stood during period prior to 1/3/03 are not identically worded and are not similar. Accordingly, by judgment dated 10/11/04, the following question was referred for decision by Larger Bench -When inputs on which Cenvat credit has been taken are removed, as such, from the factory, whether the duty of excise is to be paid on the basis of assessable value as has been determined by original manufacturer at the time of removal of the goods or on the basis of value on which the inputs are sold by the appellant to their customers in terms of the provisions of Rule 3 (4) of the Cenvat Credit Rules. 6.3 This question was considered by another Larger Bench of the Tribunal and the Larger Bench vide judgment dated 26/09/05 reported in 2005 (189) E.L.T. 131 (Tri. -LB) answered this reference in favour of the appellant. In other words what the Larger Bench decided was that during the period of dispute when an assessee cleared Cenvat credit availed inputs as such, he was required to reverse the credit equal to the duty of excise on the basis of assessable value as had been determined by the original manufacturer at the time of removal of the goods i.e. the credit originally taken, not the duty o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the assessee was aware that the duty was payable and he deliberately avoided paying it. Ongoing through the order of the original Adjudicating Authority and of the 1st Appellate Authority, I find that there are no findings as to how the appellant had deliberately short paid the amount payable under Rule 3 (4). In fact the dispute here is related to interpretation of Rule 3 (4) -whether during the period prior to 1/3/03 when in terms of the wordings of this rule, on removal of cenvated inputs as such, an amount equal to the duty at the rate in force on the date of removal of inputs and on the value determined under Section 4, 4A or Section 3 (2) of the Central Excise Act, 1944, as the case may be, was payable or the assessee's liability was only restoring the Cenvat credit originally taken. From the facts of this case, it is clear that the appellant have paid the amount strictly going by the wordings of Rule 3 (4) during the period of dispute, according to which on removal of cenvated inputs as such, an amount equal to duty on the transaction value was payable. With regard to this issue, there were conflicting decisions and for this reason, this issue had been referred to Larger ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
