9911796707
TMI Blog1999 (9) TMI 362X X X X Extracts X X X X X X X X Extracts X X X X ..... roduction, in contravention of Rule 57Q(2) of the Central Excise Rules, 1944. 2. The Adjudicating authority has however, held that credit would become available for utilisation after installation of machinery and commencement of production. The above mentioned amount includes an amount of Rs. 8,17,006/- taken on goods like Insulated wires and cables, Air-Conditioners, Electric Motors, Electric Apparatus, Parts of Cooling tower and Steel tanks and vessels, which has been disallowed totally i.e. this credit has been held to be inadmissible even after commencement of production, reason being that the items above mentioned do not qualify as capital goods in terms of Rule 57Q. A further sum of Rs. 7,96,675/- (also included in the amount of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same hereunder : Chapter 52, not having been specified among final products under Rule 57Q, till 23-7-1996 credit of duty paid on capital goods, exclusively used for manufacture of goods of Chapter 52 was not available to them. Party has pleaded that such capital goods are common for the manufacture of Chapter 52 goods as well as those falling under 58 to 63 which they intended to manufacture, as manufacture of grey cotton fabrics was essential for manufacture of goods of Chapters 58 to 63. As Rule 57R(2) provided that credit of specified duty in respect of any capital goods shall not be denied or varied on the ground that any intermediate product came into existence during the course of manufacture of the final product (goods of cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amounting to Rs. 7,96,675/- taken on capital goods exclusively used for the manufacture of Chapter 52 goods, received before 23-7-1996, is liable for disallowance/recovery under Rule 57U of the Rules on this count. We are in agreement with the above finding which is in consonance with the language of Rule 57Q and Rule 57R(2) and accordingly uphold denial of credit of Rs. 7,96,675/-. 4. Penal action against the appellants is also justified since they took credit which was not admissible to them; however, keeping in view the fact that they had not utilised the credit and in the light of our finding that credit of Rs. 8,17,006/- is available to them, we reduce the penalty to Rs. 25,000/-. The appeal is thus partly allowed. - - TaxTM ..... X X X X Extracts X X X X X X X X Extracts X X X X
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