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TMI Blog2015 (1) TMI 887X X X X Extracts X X X X X X X X Extracts X X X X ..... once goods came back, that credit can be taken back in the books of account. Penalty amounting to ₹ 6.50 lakhs is imposed on respondents for violations - Decided partly in favour of Revenue. - E/60179/2013 - Final Order No. A/53230/2014-SM(BR) - Dated:- 22-8-2014 - Shri Manmohan Singh, Member (T) Shri R.K. Mishra, DR, for the Appellant. None, for the Respondent. ORDER The Revenue has come up in appeal against the OIA No. MRT-EXCUS-002-APP-53/13-14, dated 24-6-2013 passed by the Commissioner (Appeals), Meerut, wherein the Commissioner (Appeals) has set aside the OIO No. 50/Addl. Commissioner/M-II/2012-13, dated 12-12-2012 relying upon the decision of the Tribunal in the case of Zenith Machine Tools Pvt. Ltd. v. CCE, Belgaum 2010 (255) E.L.T. 83 (Tri.) = 2010 (20) S.T.R. 554 (Tri.). The Additional Commissioner has denied Cenvat credit ₹ 25,78,578/- under Rule 14 of Cenvat Credit, 2004 read with Rule 4(5)(a) of Cenvat Credit Rules, 2004 and Section 11(1) of Central Excise Act, 1944. Penalty of equivalent amount of ₹ 25,78,578/- was also imposed on the respondent along with Interest. 2. None present from the respondent side. Nor any adjournmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding to which When inputs or capital goods, on which Cenvat credit has been taken, are removed as such from the factory, or the premises of provider of output service, as the case may be, shall pay an amount equal to the credit availed in respect of such inputs or capital goods and such removal shall be made under the cover of an invoice referred to in Rule (9); . Therefore, the amount of Cenvat credit involved on the capital goods which are not installed in the factory premises of the party is recoverable. (c) That the party has sent the capital goods under the job work Challans and the entry of the same was made in the relevant register, thus the party was required to follow the procedure of job-work as prescribed under Notification No. 214/86, which has not been followed. (d) That the Commissioner (Appeals) failed to appreciate the merit of the case individually and has placed reliance on the decision of the Hon ble CESTAT in the case of Zenith Machine Tools Pvt. Ltd. v. CCE Belgum - 2010 (255) E.L.T. 83 (Tri.). The instant matter is not covered by the said judgment of the Hon ble CESTAT inasmuch as that the sister concern of M/s. Zenith Machine Tools Pvt. Ltd. was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditions have to be strictly complied with. Therefore, CEGAT endorsed the view that the exemption from operation of Rule 174, was not available to the appellants. On the fact found, the view is on terra firma. We find no merit in this appeal, which is, accordingly, dismissed. Similarly, in the instant matter the condition of receiving the capital goods within 180 days after job work in terms of Rule 4(5)(a) of Cenvat Credit Rules, 2004 has not been fulfilled, therefore, the benefit of Cenvat credit on the capital goods under reference is not admissible. (f) The party deliberately and wilfully did not disclose to the Department that they have removed the goods without reversing the amount of Cenvat credit involved on the goods under job-work Challans to avoid the reversal of Cenvat Credit on the goods. This fact was detected only after scrutiny of the records of the party during the audit conducted by Audit team. 4. The matter was examined with the assistance of ld. DR. Ld. DR pointed out that the unit wherefrom capital goods have been cleared for instalment in the record plant has been claimed as one unit. He further informed that no separate registration h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but has been undertaken by the other party. I have also examined the above judgment. Commissioner (Appeals) has quoted following Para from above judgment which is reproduced for ready reference :- 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 capital 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 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 whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar and liable to be reversed. 8. In the instant case the party has neither followed job work procedure nor returned their capital goods within specified time. Accordingly Cenvat credit so taken is irregular and liable to be reversed immediately after 180 days. The party was well conversant with rules and they have deliberately avoided to comply these rules. I find that law as provided under Rule 4(5)(a) of the Cenvat Credit Rules, 2004 is very clear and it envisage that the party was required to reverse the Cenvat credit taken on inputs as well as capital goods sent to job worker, on the goods sent for job work not received back within one hundred eighty days. In the impugned show cause notice. I find that Cenvat credit amounting to ₹ 25,78,578.90 involved on capital goods sent by the party, which have not been received back within 180 days so far, is rightly demanded under the provisions of Rule 14 of the Cenvat Credit Rules, 2004 read with Rule 4(5)(a) of the Cenvat Credit Rules, 2004 and Section 11A(1) of the Central Excise Act, 1944. 9. In view of above, I am inclined to accept departmental appeal and hold that without proper following up of procedure, Cenvat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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