2009 (5) TMI 731 - AT - Central Excise

Summary

Issues:
- Dismissal of Appeals for want of COD Clearance
- Eligibility of Public Sector Unit to claim CENVAT credit for capital goods
- Interpretation of Rule 4(b) of the Cenvat Credit Rules, 2002

Issue 1: Dismissal of Appeals for want of COD Clearance
The Appeals in question were dismissed initially due to the lack of COD Clearance. However, the Appellant, a Public Sector Unit, has since obtained COD clearances to pursue the Appeals before the Tribunal. Consequently, the Orders of dismissal were recalled, and the Stay Petitions and Appeals were restored to their original numbers.

Issue 2: Eligibility of Public Sector Unit to claim CENVAT credit for capital goods
The Public Sector Unit had taken 50% of the credit for capital goods received in the first year and the remaining 50% in the subsequent year. The Revenue's objection was based on the installation of capital goods after taking credit in the second financial year. The Tribunal analyzed Rule 4(b) of the Cenvat Credit Rules, 2002, which allows for the balance of credit to be taken in any subsequent financial year if the capital goods are in possession and use of the manufacturer. The Tribunal found that the Rule does not specify denial of credit based on the timing of installation, only requiring possession and use in subsequent years, which the Appellant had fulfilled.

Issue 3: Interpretation of Rule 4(b) of the Cenvat Credit Rules, 2002
The Departmental Representative argued to consider only the Stay Petitions first, deferring the Appeals for later decision. However, the Tribunal rejected this argument, stating that the Appellants were entitled to claim 50% of the balance credit in the subsequent year as they possessed and used the capital goods as required by the Rules. Consequently, the Stay Petitions were allowed, the impugned orders were set aside, and all five Appeals were allowed based on the legal analysis provided.

This comprehensive analysis of the judgment highlights the issues involved, the Tribunal's interpretation of the relevant rules, and the ultimate decision in favor of the Appellants based on the fulfillment of the legal requirements.