Polyplastics Industries (India) Pvt. ... vs Cce & St, Panchkula

[Arising out of Order-in-Original No.40/Commr./PKL/2013 dated 09.12.2013 passed by the Commissioner of Central Excise, Panchkula]

For approval and signature:

HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)

1. Whether Press reporters may be allowed to see the

order for publication as per Rule 27 of the CESTAT

(Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the

CESTAT (Procedure) Rules, 1982 for publication in

any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy

of the Order?

4. Whether Order is to be circulated to the Departmental

authorities?

__________________________________________________

Polyplastics Industries (India) Pvt. Ltd. Appellant

Vs.

CCE & ST, Panchkula  Respondent

Present for the Appellant :Shri Rahul Tangri, CA

Present for the Respondent: Shri M.S. Negi, DR

Coram: HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)

Date of Hearing/Decision: 18.06.2015

FINAL ORDER NO. 53292/2015

PER: S.K. MOHANTY

The brief facts of this case are that the appellant is engaged in the manufacture of different automobile parts. During the disputed period, the appellant availed cenvat credit of Central Excise duty paid on moulds, treating the same as capital goods. The cost of moulds purchased from open market was recovered by the appellant from the customers of automobile parts. Upon verification of the invoices issued by the appellant, the Central Excise Department found out such fact and accordingly, denied the Cenvat benefit to the appellant under Rule 3 (5) of the Cenvat Credit Rules, 2004. Hence, the present appeal before this Tribunal.

2. The submissions of the appellant are that the moulds purchased from the market have been installed in the factory for manufacture of the automobile parts. According to the appellant, since the moulds have not been removed from the factory, the rigor of Rule 3 (5) of the rules will have no application for reversal of the cenvat credit. The appellant further submits that the confusion had arisen because of issuance of invoice on the customers for recovery of the cost of moulds. The ld. Consultant, Shri Rahul Tangri appearing for the appellant submits that the moulds have not been removed from the factory and to that effect, he has produced the Chartered Engineers certificate before this Tribunal.

3. The Departments contention is that the appellant had not produced any evidence to show that the moulds have not been removed to the customers under the cover of invoices issued by it. It is the further argument of the Department that since the ownership/title of the mould has been transferred by the appellant to the buyers, cenvat credit cannot be available.

4. I have heard the ld. Counsel for both sides and perused the records.

5. I find from the available records that upon verification of the documents and after visiting of the factory of the appellant, the Chartered Engineer has certified that the moulds in question are in possession of the appellant and that the said moulds are running in good working condition. The said certificate proves beyond any shadow of doubt that the moulds on which cenvat credit taken by the appellant had been installed in the factory for use, in or in relation to manufacture of the final product. In view of the fact that the said moulds have not been removed from the factory, the requirements of Rule 3 (5) of the Cenvat Credit Rules will have no application. The said rule provides payment of equal amount of cenvat credit, when the Cenvat availed inputs or capital goods are removed as such from the factory. Since, moulds, in this case, have not been removed from the factory by the appellant; denial of cenvat benefit by the authorities below is not justified. Further, ownership or control of capital goods by the assessee is not a decisive factor for determination of eligibility to Cenvat credit. As per the statutory provisions, an assessee is entitled to avail Cenvat credit on the inputs or capital goods, upon fulfilment of the condition that those goods have suffered duty and received in the factory of manufacture of final product. In the present case, since the requirement of the Cenvat statute has been duly complied with by the appellant, denial of Cenvat credit on moulds is not proper and justified.

6. Therefore, the impugned order confirming the Cenvat demand under Rule 3(5) of the Cenvat Credit Rules, 2004 is set aside and the appeal is allowed in favour of the appellant.

(Dictated and pronounced in the open Court)

(S.K. MOHANTY)

MEMBER (JUDICIAL)

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