2023 (10) TMI 954 - AT - Central Excise

Denial of CENVAT Credit on capital goods to the extent of 50% thereof - appellant procured the capital goods and have not availed any cenvat credit of duty paid in the financial year 2006-07 and took whole of the cenvat credit in the financial year 2007-08 - HELD THAT - The appellant has complied with the condition of Rule 4(2)(b) of the Cenvat Credit Rules, 2004 as they were entitled to take 50% of the credit in the financial year 2006- 07, where they have not taken any cenvat credit and balance amount credit they were entitled to take in the financial year 2007-08 which they have taken. There are no merit in the impugned order and the same is set aside - appeal allowed.

Summary

Issues involved: Denial of cenvat credit on capital goods to the extent of 50% u/s Rule 4(2)(b) of the Cenvat Credit Rules, 2004.

Summary:

Issue 1: Denial of cenvat credit on capital goods

The appellant appealed against the order denying cenvat credit on capital goods to the extent of 50%. The appellant procured capital goods in 2006-07 and availed 100% cenvat credit in 2007-08 instead of 50%. The Revenue contended that the appellant was entitled to only 50% cenvat credit in 2007-08. Proceedings were initiated to deny 50% cenvat credit availed in 2007-08. The demand was confirmed with interest and penalty. The appellant argued that they were entitled to take 50% credit in 2006-07 and the remaining in 2007-08, which they did. The Tribunal held that the appellant complied with Rule 4(2)(b) as they did not take any credit in 2006-07 and availed the balance in 2007-08. The impugned order was set aside, and the appeal was allowed with consequential relief.

Conclusion:
The Tribunal ruled in favor of the appellant, holding that they had followed the requirements of Rule 4(2)(b) of the Cenvat Credit Rules, 2004. The denial of cenvat credit on capital goods to the extent of 50% was set aside, and the appeal was allowed with consequential relief.