By TIOL News Service

MUMBAI, DEC 19, 2017: THE appellant availed CENVAT Credit in respect of capital goods i.e. moulds and dies received for repairs, reconditioning etc. u/r 16 of CER and after repairsit was cleared under Rule 4 (5)(b) of CENVAT Credit Rules to their job workers without payment of duty.

The case of the department is that since the appellant had received the goods u/r 16 and availed the credit, the only option under Rule 16 is to clear the repaired goods on payment of duty and there is no other option.

The adjudicating authority confirmed the demand and imposed equal amount of penalty.

Hence, the appellant is before the CESTAT.

It is submitted that as CENVAT credit has been allowed under rule 16, therefore, the CCR would apply for the movement of such goods and the clearances made by them are as per the law.

The Bench extracted rule 16 of CER and observed –

“…From the above Rule 16 it can be seen that even though the credit is allowed under Rule 16 but it is provided in Rule 16, the credit is allowed as if under CENVAT Credit Rules. As regard CENVAT credit the provisions of CENVAT Credit Rule is applicable. Once CENVAT Credit Rules is applicable, appellant is allowed to clear the input under Rule 4(5)(b) if the removal is for job work to the job worker. Accordingly, we are of the considered view that the clearance of capital goods under Rule 4(5) (b) is correct and legal, consequently no duty can be demanded…"

The impugned order was set aside and the Appeal was allowed.

(See 2017-TIOL-4457-CESTAT-MUM)