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2024 (10) TMI 677 - AT - Central ExciseCENVAT Credit - capital goods - case of the department is that since at the time of receipt of capital goods, the appellant s goods were exempted under N/N. 30/2004-CE. they are not eligible for Cenvat credit on the capital goods - Rule 6(4) of Cenvat Credit Rules - HELD THAT - The issue in the appellant s own case is squarely covered by this Tribunal s final order in 2019 (11) TMI 292 - CESTAT AHMEDABAD where it was held that ' It is also observed that the Tribunal in the cited judgments under the same set of facts and dispute related to notifications 29/2004-CE and 30/2004-CE held that even though initially Nil rate of duty exemption under notification 30/2004-CE has been availed and subsequently, notification no. 29/2004-CE availed and paid the duty, the Cenvat Credit on capital goods is admissible.' From above decision, it can be seen that the facts of the present case are identical to the fact of the above case in the appellant s own case. Therefore, ratio of the above decision is directly applicable. Accordingly, the appellant is entitled for the Cenvat credit on capital goods. The impugned order is set aside - Appeal is allowed.
Issues:
1. Eligibility of Cenvat credit on capital goods under Rule 6(4) of Cenvat Credit Rules. 2. Interpretation of Rule 6(4) regarding the period for which capital goods must be used for exempted goods. 3. Application of notifications 29/2004-CE and 30/2004-CE on Cenvat credit eligibility. Analysis: Issue 1: Eligibility of Cenvat credit on capital goods under Rule 6(4) of Cenvat Credit Rules The appellant availed Cenvat credit on shuttle-less Water Jet Looms, Capital Goods, during a specific period. The department contended that since the appellant's goods were exempted under Notification No. 30/2004-CE at the time of receipt of capital goods, they are not entitled to Cenvat credit on the capital goods. The appellant argued that as per the amended Rule 6(4) of Cenvat Credit Rules, they are eligible for the credit as they started manufacturing goods attracting excise duty within two years of receiving the capital goods. The Tribunal referred to a previous order in the appellant's favor and held that the appellant correctly availed the Cenvat credit. Issue 2: Interpretation of Rule 6(4) regarding the period for which capital goods must be used for exempted goods The Tribunal analyzed the amended Rule 6(4) of Cenvat Credit Rules, which specifies that no Cenvat credit shall be allowed on capital goods used exclusively in the manufacture of exempted goods for two years from the date of commencement of production. The Tribunal noted that in the present case, the capital goods were used for manufacturing dutiable goods under an exemption notification within two years of installation, making the appellant eligible for Cenvat credit. The Tribunal relied on legal precedents to support its interpretation of the rule and concluded that the appellant met the conditions for availing the credit. Issue 3: Application of notifications 29/2004-CE and 30/2004-CE on Cenvat credit eligibility The appellant argued that even though they initially availed exemption under Notification No. 30/2004-CE, the goods manufactured were not exempted per se. They started clearing the goods under Notification No. 29/2004-CE from a specific date, indicating that the capital goods were not used exclusively for exempted goods. The Tribunal considered various judgments related to these notifications and ruled in favor of the appellant, stating that the Cenvat credit on capital goods is admissible based on the specific circumstances of the case and the applicable legal provisions. In conclusion, the Tribunal set aside the impugned order and allowed the appeal, stating that the appellant is entitled to Cenvat credit on the capital goods based on the interpretation of Rule 6(4) and the application of relevant notifications.
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