The Tax Publishers2018 TaxPub(EX) 625

 

TVS Srichakra Ltd. v. Commr. of CGST & CE

 

CENVAT CREDIT RULES, 2004

--Cenvat credit--Deemed removal of capital goodsAllowability of----Revenue was not justified in denying the Cenvat credit alleging that contemporaneous lease back rental agreement entered by assessee with respect to plant and machinery was merely a deemed removal because revenue had not treated the sale transaction as genuine, therefore, the question of deemed removal of the goods did not even arise.--Assessee-company was manufacturing various types of tyres and tubes and it availed of Cenvat credit with respect to capital goods, i.e., on plant and machinery sold to a customer pursuant to a contemporaneous lease back rental agreement entered for financial accommodation. Revenue alleged that there was no removal of capital goods from the factory premises of assessee and only deemed removal was made and therefore, assessee was not eligible for credit. Held: Where inputs or capital goods on which Cenvat credit was taken are removed as such from the factory, then subject to compliance of other requirements, the credit availed in respect of inputs on capital goods shall be paid. Since Revenue had not treated the sale transaction as genuine, therefore, the question of deemed removal of the goods will not even arise, so as to deny the credit to assessee. Therefore, matter was remanded back for fresh consideration.

Cenvat Credit Rules, 2004 Rule 3(5)

Relied:Commissioner v. CESTAT, Chennai 2015 (323) E.L.T. 290 (Mad.), East India Commercial Co. Ltd. v. Collector 1983 (13) E.L.T. 1342 (S.C.), and Hero Motors Ltd. v. Commissioner 2014 (310) E.L.T. 729 (All.)

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