2015 (10) TMI 961 - AT - Central Excise

Denial of MODVAT Credit - Notification No. 11/95-CE (NT) dated 16.03.1995 - held that - Sub-rule 2 of Rule 57Q clearly provide that other than those capital goods in respect of which credit of duty allowable under earlier Rule or Notification prior to 16.03.1995, shall be allowed if such goods received in their factory even before 16.03.1995. In the present case, there is no dispute that the respondent received the capital goods prior to 16.3.1995, hence they are eligible to avail cenvat credit - Commissioner (Appeals) has given a detailed finding in respect of limitation. Revenue has not seriously disputed this in the grounds of appeal. I agree with the findings of the Commissioner (Appeals). - No reason to interfere the order of the Commissioner (Appeals) - Decided against Revenue.

Summary

Issues:
- Appeal against order of Commissioner (Appeals) set-aside by Revenue
- Eligibility of availing CENVAT credit for capital goods received prior to 16.03.1995
- Dispute regarding time-barred invoices
- Interpretation of Rule 57Q and Notification No. 11/95-CE (NT) dated 16.03.1995
- Extension of limitation benefit by Commissioner (Appeals)

Analysis:

1. The Revenue filed an appeal challenging the order of the Commissioner (Appeals) that set aside an adjudication order. The Respondent, engaged in manufacturing Soda Ash and Soda-bicarb, availed modvat credit on capital goods received before 16.03.1995 under 55 invoices. A show cause notice was issued alleging wrongful availing of modvat credit due to amended provisions of Cenvat Credit Rules. The adjudicating authority confirmed the demand, interest, and imposed a penalty, which was set aside by the Commissioner (Appeals).

2. The main contention was that the Respondent, having received capital goods before 16.03.1995, was ineligible to avail CENVAT credit under the amended provisions. The dispute also involved time-barred invoices.

3. Rule 57Q, inserted by Notification No. 11/95-CE (NT) dated 16.03.1995, was crucial for determining eligibility for CENVAT credit. The rule stated that credit of specified duty on capital goods received before 16.03.1995 shall not be allowed unless credit was allowable under earlier rules or notifications. As the Respondent received capital goods before the specified date, they were eligible for CENVAT credit.

4. The Revenue argued against the Commissioner (Appeals) extending the benefit of limitation for three invoices. The Commissioner's order detailed the application of Rule 57Q and the notification, emphasizing that the capital goods were received and declared before 16.03.1995, with the department acknowledging them as capital goods. The Commissioner's findings on limitation were not seriously disputed by the Revenue.

5. The Tribunal found no reason to interfere with the Commissioner (Appeals) order, ultimately rejecting the Revenue's appeal. The detailed analysis of Rule 57Q and the application of the notification supported the Respondent's eligibility for CENVAT credit on the capital goods received before 16.03.1995. The Commissioner's decision on extending the benefit of limitation was upheld, emphasizing the lack of serious dispute from the Revenue.