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TMI Blog2017 (11) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant Shri H.C. Saini, (Authorized Representative), - for Respondent ORDER Per: Anil Choudhary The issue in this appeal is whether the appellant is liable to pay Central Excise duty by way of reversal under the provisions of Rule 3(5) of Cenvat Credit Rules, 2004. 2. The brief facts of the case are, as under:- 2.1 Acting on the specific intelligence/information that the notice is removing capital goods without discharging duty liability, the officers of Preventive Branch, Central Excise Hqrs., Indore visited the factory premises of the Noticee on 14.04.2009 and found that used capital goods (plant machinery) loaded in trucks were ready for dispatch. On verification of sale invoice No.1 dated 10.04.2009 to be issued for the sale of the above said capital goods, it is revealed that the capital goods were being removed as scrap assessing nil duty i.e. without payment of duty of M/s Makwana Chemi-Equip. Pvt. Ltd., Plot No. A-290, TTC Industrial Area, Mahape, Navi Mumbai. 2.2 The officers on reasonable belief that the goods were being removed without payment of duty, a panchnama to this effect was drawn on the spot i.e. on 14.04.09 in the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was no addition. 2.4 As per Rule 3 (5A) of Cenvat Credit Rules, 2002 if the capital goods are cleared as waste and scrap, the manufacturer shall pay an amount equal to the duty leviable on transaction value. 2.5 It was only after the issue was taken up by the Central Excise Officers during their visit to the noticee s factory on 14.04.09, the appellant cancelled the invoice No.0001 dated 10.04.09 wherein the contravening capital goods were assessed to nil duty. After cancelling invoice No.001 dated 10.04.2009 wherein the contravening capital goods were assessed to nil duty. After cancelling invoice No.001 dated 10.04.09 the appellant issued invoice No.0002 dated 15.04.09 to 0007 dated 15.04.09 assessing the capital goods to Central Excise duty i.e. @ 8% ad-valorem and thus paid total duty amounting to ₹ 28,92,830/-. Had it not been pointed out the Noticee would have removed the contravening capital goods without payment of duty which is recoverable under proviso to Section 11A (1) of Central Excise Act, 1944. 2.6 As mentioned above that in terms of the agreement dated 18.03.09 between the notice and the buyer i.e. M/s Makwana Chemi-Equip. Pvt. Ltd., the tot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, 2004. 3. The show cause notice was adjudicated by the Additional Commissioner on contest and accordingly, confirmed and appropriated the amount already deposited, as follows: a) The demand of Central Excise duty of ₹ 16,48,189/- in terms of Section 11A of the Central Excise Act, 1944 read with Rule 3(5) of the Cenvat Credit Rules, 2004 was confirmed. b) The balance amount of ₹ 12,44,641/- paid and collected by the appellant as Central Excise duty in terms of Section 11D of the Central Excise Act, 1944, was also confirmed. c) The amount so collected was ordered for appropriation against the payment already made by the Appellant. 4. Being aggrieved, the appellant preferred appeal before learned Commissioner (Appeals) who vide the impugned order was pleased to reject the appeal. Being aggrieved, the appellant is before this Tribunal. 5. The learned Counsel for the appellant urges that it has been accepted by the adjudicating authority that these are used capital goods. Therefore, the demand, as per show cause notice under Rule 3(5A) of Cenvat Credit Rules, 2004 is incorrect. Further, the benefit of credit or deduction of 2.5% per quarte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed duty, which was not applicable and/or excisable under the scheme of the Act. It is further urged that the Order-in-Original is beyond the scope of the show cause notice. Although, the show cause notice was issued under Rule 3(5A) of Cenvat Credit Rules, 2004 but in the Order-in-Original, it was accepted by revenue that the goods removed are not scrap and hence provisions of Rule 3(5A) of Cenvat Credit Rules are not applicable. Further, the demand have been confirmed under Rule 3(5) of Cenvat Credit Rules, 2004 and also under Section 11D of the Central Excise Act, which are beyond the scope of the show cause notice. The learned Counsel further urges that it have been held by the Hon'ble Supreme Court in the case of M/s Sun Pharmaceuticals Industries Ltd. reported at 2015 (326) ELT 3 (S.C.) that no demand can be confirmed beyond the allegations made in the show was notice and or demand proposed in the show cause notice. 6. The learned A.R. for revenue relies on the impugned order and reiterates the facts on record. He further, contended that the appellant was required to pay an amount equal to Cenvat credit taken on the said capital goods, as reduced by 2.5% for each qu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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