By TIOL News Service

CHANDIGARH, MAY 07, 2018: THE appellant is engaged in the manufacture of automobile parts. They are also manufacturing dies which were sent to the job workers without payment of duty on the premise that these dies were used by them captively for manufacture of their final products and availed exemption under  Notification No.67/95-CE dated 16.3.1995.

SCN dated 17.09.2007 was issued invoking extended period and demanding CE duty on the clearance of dies to the job workers by denying the exemption notification.

The demand was confirmed by the CCE, Delhi-III on 29.08.2008 along with penalties and interest.

The appeal was heard in July 2017 .

There was a difference of opinion between the Division Bench members.

We reported this order dated 14.12.2007 as 2018-TIOL-328-CESTAT-CHD.

The following matter was referred to the Third Member -

Whether in the facts and circumstance of the case and evidences placed on record, Member (Judicial) is correct in holding there being Revenue neutral situation, in terms of Rule 4(5) (a)/(b) of Cenvat Credit Rules, 2004, the appellant is not required to reverse Cenvat credit;

OR

Whether, in the facts and circumstances of the case and the evidences placed on record, the Member (Technical) is correct in holding that the plea of Revenue neutrality is not tenable after irregular availment of a notification especially when credit is not available to appellant himself and the provisions of Rule 4(5) (a)/ (b) of the Rules are not applicable in this case.

The matter was heard by the third Member (Technical) recently.

And it was held –

"23. …, I find that the provisions of clause (b) of sub-rule 5 of Rule 4 of Cenvat Credit 2001 provide that if moulds are brought into the factory by a manufacturer, he is eligible for availment of Cenvat Credit of duty paid on the same. Further, the manufacturer of the goods is required to pay Central Excise duty on the goods manufactured. Incidentally, in the present case, the manufacturers of moulds and the legal entity eligible to avail Cenvat Credit of duty so paid is one and the same, on following all the provisions of law, the situation emerges that the appellant is required to debit their Cenvat Account for payment of Central Excise duty on the moulds manufactured by them and removed to the job-worker under said provisions of Rule 4(5)(b) and further they are eligible to take Cenvat Credit of the same duty paid. Therefore/ I find that this situation is revenue neutral. I therefore, agree with the views of Brother Member (Judicial)."

In view of the Majority decision, the appeal was allowed.

(See 2018-TIOL-1443-CESTAT-CHD)