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2012 (9) TMI 383 - HC - Central ExciseCenvat credit on capital goods - assessee availed 100% credit in the first year itself instead of 50% - Held that - It is not the case of the revenue that the credit wrongly availed by the assessee has been utilized in the initial financial year. If the credit of the subsequent financial year wrongfully taken in the initial financial year if not utilized till the commencement of the subsequent financial year, then no prejudice is caused to the revenue - against revenue. Credit of sales taxes in Cenvat account - Held that - As the revenue has not adduced any evidence to establish that the assessee has wrongly taken credit of the sales tax paid by the assessee no fault can be found with the decision of the Tribunal - against revenue.
Issues:
1) Interpretation of Cenvat Credit Rules - whether 100% credit is allowable when only 50% is admissible in the current financial year. 2) Allowance of sales taxes in Cenvat account - whether it is permissible. Analysis: 1) The appeal raised two questions of law regarding the interpretation of Cenvat Credit Rules. The revenue contended that the assessee wrongly claimed 100% credit in the initial financial year when only 50% was admissible, and the Tribunal erred in upholding this. However, upon review of the Commissioner (Appeals) and CESTAT orders, it was found that the authorities did not uphold the full credit claim. They determined that by the time the appeal was heard, the assessee was entitled to the remaining 50% credit for the following financial year. Since the wrongfully claimed credit was not utilized in the initial year, the revenue was not prejudiced, leading to the Tribunal's decision being deemed acceptable. 2) The second issue pertained to the inclusion of sales tax in the Cenvat account. The Tribunal found no evidence presented by the revenue to prove that the assessee had wrongly availed sales tax credit. Consequently, the Tribunal's decision on this matter was deemed appropriate. The judgment concluded by disposing of the appeal without any order as to costs, affirming the decisions made regarding both issues.
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