At, Customs Excise Service Tax Appellate Tribunal South Zonal Bench At Chennai
By, THE HONORABLE JUSTICE: ARCHANA WADHWA
For Petitioner: S. Ramachandran, Consultant And For Respondents: S. Govindarajan, AC (AR)
1. The appellant, who is engaged in the manufacture of Tractor parts falling under Chapter 87 of CETA, 1985 has two units i.e., Unit-I and Unit-II. They purchased a Power Press in the name of Unit-I, availed the credit in the name of Unit-II shifted the said power press to their unit I who was exclusively doing job work for Unit-II. The said credit to the extent of Rs. 7,41,600/- was availed during the period July, 2009 to April, 2010.
2. As a result of audit objection, proceedings were initiated against the appellant by way of issuance of a Show cause notice dated 03.07.2014, proposing to deny the credit on the ground that the said power press has not been found to be physically present at the appellants premises but was installed at their Unit-II. The proceedings resulted in passing of the order by the original adjudicating authority and upheld by the Commissioner (Appeals). Hence the present appeal.
3. After hearing both sides, I find that the sole reason for denial of credit is that the same was availed by Unit-II, whereas the machine was installed in Unit-I. The appellants have taken a categorical stand before the authorities below is unit-I is also their own Unit doing exclusively job work for them and the goods manufactured at Unit-I are cleared by Unit-II on payment of duty. They also assailed the demand on the point of limitation.
4. I find that the issue is no more res integra and stand settled by various decisions of the Tribunal. In the case of S.G. Zaveri Pharmapack Vs. CCE, Mumbai-2007 (217) ELT 519 (Tri.-Mum.), it was observed that Cenvat credit in respect of capital goods cannot be denied to the manufacturing unit if the same is installed at the job working premises. Similarly, in the case of Pooja Forge Ltd. Vs. CCE, Faridabad : 2007 (8) STR 318 (Tri.-Del.), movement of capital goods to the job worker's premises, who is the appellants own unit, was held as not reasonable ground for denial of credit. The said decision of the Tribunal stands confirmed by the Hon'ble Punjab & Haryana High Court reported as 2008 (229) ELT 46 (P & H). Similarly in the case of Vishal Malleables Ltd. Vs. CCE, Surat 2009 (234) ELT 286 (Tri.-Ahmd.), the Cenvat credit was held admissible in respect of grinding wheels which was found in the adjacent unit of the assessee.
5. As there is no dispute that Unit-I and unit-II belong to the same assessee, and the goods after having been manufactured by the job worker are shifted to Unit-II from where they stand cleared on payment of duty, I find no justification for denial of credit in the light of the law declared in precedent decisions mentioned supra.
6. Even if the problem is viewed from another angle, the credit could have been availed by Unit-I, who could have cleared the goods on payment of duty by utilizing the said credit and credit of such duty paid by Unit-I would have been availed by Unit-II, thus neutralizing the entire effect. In such a situation also, the Unit-II would have availed the entire credit of duty paid on the capital goods, but via a different route.
7. Apart from the above, I also find that the demand stands raised and confirmed by invoking the longer period of limitation. Admittedly, the appellants have availed the credit by reflecting the same in the statutory records for which the statutory returns were being filed by them. As Unit-I belong to the appellant only, there could be a bona fide belief on their part that they are entitled to avail the credit. The lower authorities have simply observed that consequent to the introduction of self-assessment, the onus is on the assessee to examine the availability of Cenvat
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credit. Having hold that the issue involves legal interpretation and in the absence of any evidence reflecting upon the suppression or mis-statement on the part of the assessee that mala fide intention, I am of the view that the extended period was not available to the Revenue. 8. In view of the foregoing, appeal is allowed on merits as also on limitation, with consequential relief to the appellant.