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TMI Blog2007 (2) TMI 530X X X X Extracts X X X X X X X X Extracts X X X X ..... [2004 (178) E.L.T. 548 (Tribunal)]. 2. The appellants received capital goods prior to 1-4-2000. As they could not install the goods, they were not in a position to take Modvat credit. Had they installed the goods prior to 1-4-2000, the Modvat credit would have been restricted to 50% of the duty paid. Be that as it may, there was change in the rules relating to input credit with effect from 1-4-2000. The Modvat was christened as Cenvat. The restriction of credit to 75% of the duty on the capital goods was removed. The appellants installed the goods after 1-4-2000. In terms of the revised provisions relating to Cenvat, they availed 50% of the credit in the financial year 2000-01 and the balance in the subsequent year. Revenue proceeded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received prior to 1-4-2000 they were not installed. Therefore, the appellants could not have earned Modvat credit. (2) What the appellant had earned on installation of the capital goods after 1-4-2000 was Cenvat credit under Rule 57AB of the CE Rules read with Section 57AC(2)(c) and not Modvat credit under Rule 57Q(3). Hence the provisions of the subsequent Rule 57AG would not be applicable to the instant case. (3) As per Rule 57AC(2)(c) the appellant was entitled to Cenvat credit in respect of the goods provided they would avail only 50% of the said Cenvat credit during the year 2000-0 under the said Rule. Further as per Rule 57AB, the appellant was entitled to avail Cenvat credit of the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e aforementioned circular in view of Rule 57AB allowing Cenvat credit of 100% of the CVD. The Commissioner has levied penalty under Section 11AC of the Central Excise Act, 1944. There is no finding of any violation of any provisions of Central Excise Act, or the Rules thereunder by the appellant in the impugned order. There is no mens rea on the part of the appellant without which any levy of penalty will be highly illegal. (7) The learned Advocate relied on the following case laws: (i) Rao Shiv Bahadur Singh and another v. State of Vindhya Pradesh (AIR 1953 S.C. 394) (ii) J.K. Cotton Spinning and Weaving Mills Co Ltd. v. State of UP & other, (AIR 1961 S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estricted to 75% of the CVD paid on the capital goods. However we cannot over-look the following provision in the then rules relating to Modvat. We reproduce Rule 57Q(7) herein below: "The credit of the specified duty on capital goods (other than those capital goods covered under S. Nos. 5, 7, 10, 11 and 12 of column (2) of the Table below sub-rule (1) and received in the factory on or after the 1st day of January 1996, shall not be taken on a date prior to the date on which such capital goods are installed or, as the case may be, used for manufacture of excisable goods, in the factory of the manufacturer as certified by such manufacturer or a person designated by him for this purpose." From the above provision, it is very clear that even ..... X X X X Extracts X X X X X X X X Extracts X X X X
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