Custom, Excise & Service Tax Tribunal
M/S. Modular Auto Ltd vs Cce, Chennai-Ii on 2 November, 2017
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
E/40924/2017
(Arising out of Order-in-Appeal No. 33/2016 (CXA-II) dated 31.12.2016 passed by the Commissioner of Central Excise (Appeals-II), Chennai).
M/s. Modular Auto Ltd. Appellant
Vs.
CCE, Chennai-II Respondent
Appearance Shri M. Kannan, Advocate for the appellant Shri Arul C. Durairaj, Supdt. (AR) for the Respondents CORAM :
Honble Smt. ARCHANA WADHWA, JUDICIAL MEMBER Date of Hearing/Decision: 02.11.2017 FINAL ORDER No. 42651/2017 As per facts on record, the appellant who is engaged in the manufacture of motor vehicle parts transferred one machine, which was purchased by them in January, 2003 to their Unit-II in June 2013. Revenue was of the view that they are liable to pay duty in respect of the same.
2. On the other hand, appellants contention was that in terms of Cenvat Credit Rules, if depreciation @ 2.5% per quarter is allowed, the value of the machine would be nil.
3. However, the lower authority observed that since the value shown by the appellant in the stock transfer document was around Rs. 5.00 lakhs, they are liable to pay duty of Rs. 70,329/- at the stock transfer of capital goods. Accordingly, after initiation of proceedings, the duty was confirmed along with imposition of penalty of Rs. 7,000/- and upheld by the Commissioner (Appeals).
4. I find that without entering into the dispute as to whether the value of the capital goods would be nil or would be the one which stands adopted by the appellant in the stock transfer documents, the goods were actually not sold by the assessees and were transferred by them to their unit-II, which is also engaged in the manufacture of identical goods. In such a scenario, it may not be stated that the appellant cleared the capital goods, thus requiring any payment of duty, in as much as the unit-II was also their own unit. In any case, and in view of the matter, the duty paid by the appellant viz. Unit-I would be available as credit to unit-II thus leading to a revenue neutral situation. In such a scenario, confirmation of any demand of duty is not justified. Accordingly, impugned orders are set aside and the appeals are allowed with consequential relief.
(Order dictated and pronounced in the open Court on) (ARCHANA WADHWA) JUDICIAL MEMBER BB 2