2004 (8) TMI 502 - AT - Central Excise

Summary

Issues:
- Claim of Cenvat credit on capital goods received before 1-4-2000.
- Interpretation of Circular No. 345/2/2000-TRU regarding the eligibility for Cenvat credit.
- Application of Rule 57AG(1) for transitional provisions.

Analysis:

1. The judgment concerns the rejection of the appellants' claim for Cenvat credit on capital goods received before 1-4-2000. The Commissioner, upon remand, denied the claim, citing the Board's Circular No. 345/2/2000-TRU, dated 29-8-2000, which allowed such credit. The Circular clarified that even if Modvat credit was not taken by the manufacturer before 1-4-2000, the manufacturer had "earned" the credit and was entitled to take Cenvat credit under Rule 57AG(1). The Tribunal noted that the Commissioner overlooked Rule 57AG(1) referenced in the Circular, emphasizing that where capital goods were received and installed before 1-4-2000, credit could be allowed under the transitional provision of Rule 57AG(1).

2. The Tribunal further considered the argument presented by the appellants' advocate that although the capital goods were received before 1-4-2000, the installation and commissioning occurred on 5-6-2000. The advocate contended that if the commissioning date was considered the installation date, the appellants would be eligible for Cenvat credit under Rule 57AC(2)(c). The Tribunal found merit in the appellants' contentions, acknowledging a strong case for their claim to Cenvat credit concerning the disputed capital goods. Consequently, the Tribunal waived the pre-deposit requirement and scheduled a regular hearing of the case on 6-10-2004.

In conclusion, the judgment delves into the intricacies of Cenvat credit eligibility for capital goods received before 1-4-2000, emphasizing the significance of the transitional provisions under Rule 57AG(1) and the interpretation of relevant circulars. The Tribunal's analysis highlights the importance of aligning administrative directives with statutory provisions to ensure the rightful entitlement of manufacturers to Cenvat credit in compliance with the law.