The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) directed re-adjudication to the adjudicating authority for confirming the recovery of CENVAT Credit of Excise duty related to the removal of epoxy molds.
Lear Automotive (India) Pvt Ltd, the appellant assessee availed CENVAT credit relates to the removal of ‘epoxy moulds’ to the manufacturer of ‘parts of automobile’ seats that were returned to the assessee for final assembly into the finished products to be supplied to Mahindra & Mahindra Ltd.
The assessee appealed against the order passed by the adjudicating authority for a demand of Rs19,16,372 ordered for recovery under rule 14 CENVAT Credit Rules (CCR), 2004.
Rajesh Ostwal and Payal Nahar, the counsels for the assessee contended that epoxy moulds had been deployed by their vendors in the manufacture of parts of the goods that were returned to them and the eligibility for availing of CENVAT credit concerning such supplies made to ‘job- -workers’.
Bhilegaonkar Deepak, the counsel for the department contended that the job worker was distinguished by the supply of materials from the principal the manufacturer which the assessee did not in the present instance and the demand had been confirmed by reference to the definition of ‘job-worker’ in rule 2(n) of CENVAT Credit Rules.
The Bench observed that the removal of such moulds to ‘job-worker’ admittedly governed by rule 4(5) of CENVAT Credit Rules permits retention of credit for a time and reversal upon completion of the deadline till such time when the goods are not returned to the principal manufacturer.
The two-member bench comprising Ajay Sharma (Judicial) and. C J Mathew (Technical) remanded the matter back to the original authority for a fresh determination regarding the recovery of CENVAT credit.
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