D.M. Misra ORDER
Dr. D.M. Misra, Member (J)
1. Heard both sides.
2. This appeal is filed against the Order-in-Appeal No. SRP/114/DMN/2013-14 dated 1.7.2013 passed by the Commissioner (Appeals), Central Excise, Customs & Service Tax, Daman.
3. Briefly stated the facts of the case are that the appellants had availed CENVAT credit on the capital goods and transferred the same to their sister unit adjacent to their factory premises for job work premises. Both the units were having separate Central Excise Registration. Alleging that credit availed on the said capital goods to the tune of Rs. 3,77,798/- is recoverable a show cause notice was issued to the Appellant on 25.01.2012. On adjudication, the demand was confirmed with interest and equal amount of penalty. On appeal, the ld. Commissioner (Appeals) upheld the order of the adjudicating authority and rejected their appeal. Hence, the present appeal.
4. Ld. Advocate Shri S. Suriyanarayanan for the appellant submits that their sister unit where capital goods have been transferred and installed was doing job work exclusively for them. Hence, the capital goods installed in job workers factory is admissible and credit availed on such capital goods cannot be denied to them. He submits that the capital goods cleared under Rule 4(5)(a) of CENVAT Credit Rules, 2004 to the job worker, if not returned within 180 days even though the credit availed is required to be reversed, but later they are eligible to take re-credit as per the said Rule. Hence, it is a revenue neutral situation. In support, he has referred to the decision of this Tribunal in the case of Zenith Machine Tools Pvt. Ltd. vs. C.C.E., Belgaum MANU/CB/0161/2010 : 2010 (255) ELT 83 (Tri-Bang.). Ld. Advocate further submits that no penalty is imposable on them in the above circumstances as held by the Hon'ble Gujarat High Court in the case of Patel Alloys Steel Pvt. Ltd. vs. C.C.E., Ahmedabad 2013 (04 LCX 0053.
5. Per contra, the ld. A.R. for the Revenue reiterated the findings of the ld. Commissioner (Appeals). He has submitted that in view of the principle of law laid down by the Hon'ble Gujarat High Court in the case of Sintex Industries Limited vs. C.C.E. MANU/GJ/0806/2012 : 2013 (287) ELT 261 (Guj.) that since both these units have separate Excise registration, therefore, credit availed on capital goods is not admissible if installed in one factory premises and used in their other unit, even they second unit carry job work for them.
6. I find that the question that needs to be answered is whether the CENVAT credit availed on the capital goods sent to their sister unit for job work and not received back within 180 days from the date of removal is recoverable or otherwise. I find that Rule 4(5)(a) of CENVAT Credit Rules, 2004 is clear in this regard, which reads as follows:
(5)(a)(i) The CENVAT credit on inputs shall be allowed even if any inputs as such? or after being partially processed are sent to a job worker and from there subsequently sent to another job worker and likewise, for further processing, testing, repairing, re-conditioning or for the manufacture of intermediate goods necessary for the manufacture of final products or any other purpose, and it is established from the records, challans or memos or any other document produced by the manufacturer or the provider of outpu........