2005 (2) TMI 626 - AT - Central Excise

Summary

Issues: Availability of Cenvat credit of duty paid on capital goods.

The judgment by the Appellate Tribunal CESTAT, Kolkata addressed the issue of the availability of Cenvat credit of duty paid on capital goods. The appellant argued for total dispensation of duty and penalty based on Rule 57AC(2)(c) and a clarification by the Ministry of Finance. However, the JDR countered, stating that the relevant rule at the time was Rule 57Q, which did not allow Modvat credit for certain steel products. The appellant was under the compounded levy scheme and received modvatable capital goods in early 2000. The JDR emphasized that the new Cenvat credit scheme was applicable only to goods received after April 1, 2000, and Rule 57AC did not apply to goods received prior to that date. The tribunal found that the appellant did not qualify for dispensation and directed them to pay Rs. 4.00 Lakhs within 12 weeks, with the remaining duty and penalty to be stayed pending compliance, setting a follow-up date for May 18, 2005. The decision was based on the specific rules applicable at the time of receiving the capital goods and the transition provisions for Cenvat credit utilization.