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TMI Blog2010 (1) TMI 558X X X X Extracts X X X X X X X X Extracts X X X X ..... licants along with interest thereon and equal amount of penalty has been imposed. 4. The applicants are engaged in the manufacture of Cement Clinkers, Cement OPC and Cement PPC. The relevant period for the decision is from April, 2006 to April, 2007. During the relevant period, the applicants were availing benefit of Notification No. 50/2003-C.E., dated 10-6-2003, as amended, and effecting clearances of cement at nil rate of duty w.e.f. 3-5-2005. In terms of the provisions of law, no Cenvat credit is admissible on the inputs or capital goods used exclusively in the manufacture of exempted goods as Rule 6 of the Cenvat Credit Rules, 2004 in that regard is very clear. 5. The applicants under letter dated 7-3-2005 had informed the Department that on commencement of commercial production from the expanded capacity, the capital goods procured for expansion project would be used in the manufacture of exempted goods for a period of ten years; however, the capital equipments used fit the expansion were expected to have life span of more than ten years and, therefore, those capital goods would be used in the manufacture of dutiable cement after the expiry of the exemption period. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsion are expected to have a life span of much more than ten years, and hence these capital gods would be used in the manufacture of dutiable cement after expiry of exemption period. Thus, during the life span of the capital goods, they would be used for the manufacture of both dutiable arid exempted goods, and hence the embargo under Rule 6(4) of the Cenvat Credit Rules, 2004 would not be applicable to such cases. He further submitted that, the learned Commissioner failed to appreciate the fact that the intention to use the impugned capital goods during their life span for the manufacture of both dutiable and exempted goods had already been conveyed to the Department under letter dated 7th March, 2005 and, therefore, it was within the knowledge of the Department that the applicants were availing the credit in relation to the said goods and, therefore, they could not have invoked the extended period of limitation for issuance of the show cause notice. Reliance is placed in the decisions in the matter of CCE, Bhopal v. Rhaskar Industries Ltd., reported in 2003 (54) RLT 301 and Commissioner of Central Excise, Indore v. Surya Roshni Ltd., reported in 2003 (155) E.L.T. 481. 8. On the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Excise, 2005 (179) E.L.T. A38 (S.C.), held that, "cenvat credit eligibility is to be determined with reference to the dutiability of the final product on the date of receipt of capital goods". Obviously, therefore, the right of the manufacturer to avail the cenvat credit depending upon the dutiability of the final product for the period for which the manufacturer wants to avail the cenvat credit, has been clearly laid down in the said decision. In such circumstances, the contention that the manufacturer having made his intention clear to manufacture dutiable goods after the expiry of the exemption period and that on that count, even during the exemption period, the manufacturer would be entitled to avail the cenvat credit, cannot be accepted. 10. The decision of the Tribunal in the matter of Collector of Central Excise, Indore v. Surya Roshni Ltd. reported in 2003 (155) E.L.T. 481 (T), cited by the learned representative for the applicants, rather than lending any assistance to the applicants, supports the decision arrived at on the point in question. Therein it was clearly held thus: "The availability of Modvat credit is to be looked into at the time of receipt of the capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for about a year, till implementation of the third phase, namely, the fabric processing. The assessee then submitted the required declaration under Rule 57-T of the Central Excise Rules with the clear intention that it shall be availing the credit on implementation of the third phase as the final product of third phase was dutiable. On implementation of the third phase, it became a composite mill and, therefore, was entitled to avail of the modvat credit facility which was kept in abeyance during the second phase of manufacturing operation. The facts clearly disclose that, during the period during which the manufacturer was not entitled to avail the modvat credit facility in accordance with the provisions of law, the facility was kept in abeyance. In other words, the facility was not availed during the said period. The manufacturer then commenced to avail the said facility after submitting the required declaration in that regard and in accordance with the provisions of law which entitled the manufacturer to avail the benefit. That is not the case in the matter in hand. Hence, the said decision is of no help to the applicants. 12. As regards the bar of limitation is concerned, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e applicants. 15. For the reasons stated above, we do not find any, prima facie, case having been made out for grant of stay of the impugned order. 16. As far as financial hardship is concerned, there is no case made out in that regard by the applicants, apart from contending that unless the pre deposit is waived, it would cause undue hardship to the applicants. The issue of financial hardship depends on the facts of each case. The party raising the issue of undue hardship has to plead and substantiate the same with necessary materials. We do not find any material in support of the plea of financial hardship. 17. For the reasons stated above, the application fails and is liable to be dismissed. However, as far as penalty amount is concerned, in our considered opinion, it would be appropriate to stay the order in that regard keeping in view the facts and circumstances of the case. Accordingly, we direct the applicants to deposit the amount disallowed as credit along with interest thereon as directed under the impugned order within a period of twelve weeks from today, while waiving the amount of penalty till the disposal of the appeal. 18. To come up for reporting compliance on 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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