Case Law Details
Hindustan Coca Cola Beverages Pvt Ltd. Vs Commissioner, Central Excise & GST (CESTAT Delhi)
Learned Counsel for the appellant has mentioned that they had purchased a generator set in the year 2004 which was used by them at their Jaipur plant. After 12 years of its use, since the Jaipur plant got closed that the said generator was shifted to another plant of appellant in Hapur. As such, the transfer was nothing but a stock transfer of the said capital goods. Rule 3(5) A (a) of CCR, 2004 is mentioned to not to be applicable to the given facts and circumstances. It is emphasised that for the applicability of said Rule, the value in question is to be the transaction value. Section 4 D of Central Excise Act 1944 defines transaction value which is the value involved during the transaction of sale. Since in the present case, the capital good was transferred from one unit of the appellant to its another unit, there is no question of sale thereof. The value of Rs. 6,14,322/- as has been assigned during the said stock transfer is mentioned to be the value as required to be notionally affixed in terms of accounting standards. Hence, same cannot be considered as the transaction value. The findings of the Adjudicating Authority Below considering the said value as transaction value and applicability of proviso to aforesaid Rule are alleged to be wrong. It is further submitted that the extended period of limitation has wrongly been invoked by the department. There is no question of any suppression of facts nor of any malafide intent. Hence, the penalty has also been wrongly imposed. The order is accordingly proposed to be set aside and appeal is prayed to be allowed.
The moot controversy to the adjudication is whether Rule 3(5A)(a) of the CCR, 2004 is applicable to the impugned transfer of Generator set after use by the appellant to its sister concern where the value of Rs.6,14,322/- has been assigned to that transfer.
The manufacturer buys the capital goods in order to use it for the manufacture of final products. The manufacturer avails the credit of excise duty on such inputs / capital goods which are utilised while making the final product as per Rule 4 of CCR, 2004. In manufacturing industry, it is a common practice to remove the goods (inputs /capital goods) from the factory place either as such or after use. It is in the later case that Rule 3(5A)(a) of CCR, 2004 , comes into picture. When the inputs/ capital goods are no longer required by the manufacturer, the manufacturer disposes of them.
In the present case, apparently and admittedly it is not the case of the appellant because the appellant has transferred the capital goods/ generator set from one of its unit to its another unit. If such a generator set would have been cleared by the appellant to any other unit, appellant definitely would have to reverse the proportionate credit on the depreciated value after deducting 2.5% of credit for each quarter or part of the use of machine from the date of taking of such credit as is apparent from Rule 3 as quoted above. Also the proviso to above said Rule, as quoted above provides that if the amount so calculated by the above method is less than the amount equal to the duty leviable on transaction value, the amount to be paid shall be equal to the duty leviable on transaction value.
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