2010 (10) TMI 981 - AT - Central Excise

Summary

Issues: Denial of Cenvat credit for capital goods installed after 1-4-2000, denial of deemed credit for inputs, imposition of penalty.

Denial of Cenvat Credit for Capital Goods:
The appellants were denied Cenvat credit of Rs. 2,14,182 for capital goods received in their factory in February-March 2000 but installed after 1-4-2000. The issue revolved around the interpretation of Rule 57AC(2C) regarding availing credit on capital goods installed post the specified date. The Tribunal noted that the appellants had not exceeded the 50% ceiling on duty paid, making them eligible for the credit. Referring to precedents like Shiva Agrico Implements Ltd. v. C.C.E. and C.C.E., Coimbatore v. Sonal Vyapar Ltd., the Tribunal held that the credit was admissible, setting aside the denial and allowing the appeal.

Denial of Deemed Credit for Inputs:
Additionally, deemed credit of Rs. 2,08,466 for MS ingots (inputs) was denied as the appellants had not made payment by cheque or cash, contrary to Notification No. 29/2000-C.E. conditions. The Tribunal considered the conditions 4 & 5 of the notification and found the denial justified based on non-compliance. However, no specific relief or allowance was mentioned in the judgment regarding this aspect, indicating a lack of eligibility for the deemed credit.

Imposition of Penalty:
Moreover, a penalty of Rs. 5,000 was imposed on the appellants. The judgment did not provide detailed reasoning or analysis regarding the penalty imposition. It appeared as a consequential order based on the denial of credit and non-compliance with the notification conditions. The penalty imposition was not specifically overturned or discussed in the judgment, suggesting its maintenance as part of the original order.

In conclusion, the Tribunal allowed the appeal regarding the denial of Cenvat credit for capital goods, citing adherence to the statutory provisions and relevant precedents. However, the denial of deemed credit for inputs and the imposition of the penalty were not explicitly addressed in terms of relief or reversal, indicating a sustained decision on these aspects. The judgment highlighted the importance of compliance with statutory conditions for availing credits and penalties in indirect tax matters, providing clarity on the interpretation and application of relevant legal provisions.