2024-VIL-286-CESTAT-AHM-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Rule 3(5A)(a) of Cenvat Credit Rules, 2004 – Demand of excise duty – Sustainability – Appellant is engaged in manufacture of motor vehicle parts for Ford India Pvt. Limited – During course of audit, department noticed that Appellant has procured certain tools and moulds on payment of duty and availed Cenvat credit of duty paid on tools and moulds and sold them to Ford India by issuing invoices on which VAT was discharged, however, no central excise duty was paid in terms of Rule 3(5A)(a) of the Rules – After following due process of law, Adjudicating Authority confirmed demand of Central Excise duty – Whether Cenvat credit availed by Appellant is hit by provisions of Rule 3(5A)(a) of the Rules – HELD – According to Rule 3(5A)(a) of the Rules, Cenvat credit is to be reversed only if capital goods on which Cenvat credit has been availed by any assessee have been physically removed from factory – No evidence has been adduced by department to prove that tools and moulds which were purchased and used by Appellant have been physically removed from their factory of manufacture – Though tools and moulds purchased by Appellant have been sold by them on record on VAT-able invoices, it is mater of record that such tools and moulds are still being used by Appellant for manufacture of automobile components which were being supplied by them to Ford India Pvt. Limited – Since tools and moulds were being used in manufacture of excisable goods, it was wrong on part of department to ask for payment of Central Excise duty on such tools and moulds that these are physically available in Appellant’s manufacturing premises – Impugned order-in-original is without any merit and is therefore, set-aside – Appeal allowed
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