9911796707
TMI Blog2015 (1) TMI 887X X X X Extracts X X X X X X X X Extracts X X X X ..... as been received. It is further noticed that two notices have been issued to the respondent on 23-11-2013 and 31-12-2013 for fixing the date of hearing on 18-12-2013 and 5-2-2014. Notice was also issued for hearing on 13-6-2014 i.e. today. When the matter was called today, again none present from the respondent side. It is observed that sufficient opportunity has been given to the respondent to appear before the Tribunal however they have chosen not to respond to the communications. 2A. The brief facts of the case are that the appellants re-engaged in the manufacture & clearances of Paper Based Decorative Laminates, Formaldehyde, Post Form Particle Board, Post Farm MOP Board, Impregnated Paper & Furniture Articles etc. and are also availing of the Cenvat credit facility on inputs & capital goods. On scrutiny of their record for the period August, 2009 to July, 2010, it was pointed out/alleged that they had sent capital goods outside their main factory for carrying out some processing (job work), but after such processing, they had not received the capital goods back in their factory within the stipulated period i.e. not received even after expiry of more than 180 days as prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter concern of M/s. Zenith Machine Tools Pvt. Ltd. was engaged in job-work exclusively for M/s. Zenith Machine Tools Pvt. Ltd. but in the instant matter, another manufacturing plant of the party is engaged in job work of the party as well as of other customers/clients. (e) That the condition for availing the benefit of Cenvat credit on the capital goods in question has not been fulfilled. The capital goods sent for job-work must be received back after job work within 180 days in terms of Rule 4(5)(a) of Cenvat Credit Rules, 2004. The said condition has not been fulfilled, therefore, the Cenvat Credit on capital goods was not admissible. The Hon'ble Supreme Court in the case of Eagle Flask Industries Ltd. v. Commissioner of Central Excise, Pune reported in 2004 (171) E.L.T. 296 (S.C.) while deciding the case of exemption from licensing under Notification No. 11/88-C.E. (N.T.) regarding non-filing of declaration under Rule 174 of erstwhile Central Excise Rules, 1944 in Para 6 has held that :- "We find that Notification 11/88 deals with exemption from operation of Rule 174 to exempted goods. The Notification has been issued in exercise of powers conferred by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods have been cleared for instalment in the record plant has been claimed as one unit. He further informed that no separate registration has been taken by them. Further no intimation was given to the Commissioner for adding the premises in the existing unit and no request for change in the registration certificate of the respondent indicating addition to the premises was made. He also submitted that even if the goods returned back, there was need to follow job work procedure. Even considering the respondent's plea that they were getting the goods made on job work basis, stipulation of return of machines or goods within 180 days under Rule 4(5)(a) of Cenvat Credit Rules, 2004 was required to be complied with. Accordingly learned DR pleaded that since no compliance to the Board's instruction as well as rules have been made, it was necessary that reversal of Cenvat credit must be insisted upon. 5. I have examined the matter. On perusal of the order of the Commissioner (Appeals) as well as grounds of appeal taken by the department, I find that issue for consideration is whether, non-registered undeclared premises where alleged job work was undertaken without intimation to the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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, who is undisputedly one of the group concerns of the appellant." 7. On the above premise, principle of revenue neutrality could have come. But as pointed out by the revenue that goods have been sent on job work without permission from competent authority. Further once proper job work challans have not been issued movement of goods from one unit to another could not be said to be regular. Good have actually moved on simple challans without having any authority of law. Further there has been no reversal of credit. I feel that movement of capital goods is also not reflected in any documents. Further there is nothing on record to indicate whether capital goods have come back and duly verified. Even goods have come back, non-following of law specially laid down cannot exonerate them. Even though divisional authority has given certificate but it cannot condone major irregularity. Once movement is not controlled/monitored, certification becomes based on entries in record only. Further i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1944." 9. In view of above, I am inclined to accept departmental appeal and hold that without proper following up of procedure, Cenvat credit availed as capital goods has to be reversed back as goods have not come back even after 180 days. Of course keeping in mind neutrality factor, credit could be restored subject to condonation/extension by the competent authority. 10. Since all these movements have taken without approval from Commissioner and second unit cannot automatically be considered as part of the main unit suppression is manifested. If this is done, whole control and monitoring mechanism envisaged in the law will become redundant. Thus appellants cannot get absolved from imposition of penalty. Through facts involve suppression but issue is basically technical in nature as if relates to compliance of proper procedure in job work. Keeping in mind, totality of facts, ends of justice will met if penalty is imposed on the respondents. 11. In view of above, it is ordered to reverse the duty credit of Rs. 25,78,578/- (Rupees twenty five lakhs seventy eight thousand five seventy eight only). However once goods came back, that credit can be taken back in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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