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TMI Blog2014 (9) TMI 366X X X X Extracts X X X X X X X X Extracts X X X X ..... edit on duty paid on such goods was, therefore, rightly taken by the manufacturer in such year. The manufacturer also thereafter took credit for the remaining 50% on 1-4-2004. The Revenue contends that since the said goods were not put in use for manufacture of final product till 13-8-2004, such credit was taken prematurely. Admittedly the capital goods so received by the respondent continued to be in possession and use on 1-4-2004 and thereafter also. In fact, such capital goods were utilized for the purpose of setting up of the laboratory. It can, therefore, not be stated that the goods were not in possession and use of the manufacturer. The manufacturer puts such goods to use for setting up of the laboratory which ultimately would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondent availed 50% of the Cenvat credit on purchase of such inputs in the said year itself. In the following year on 1-4-2004, the respondent availed remaining 50% of the Cenvat credit to the tune of ₹ 58,86,709/-. The Department, however, was of the opinion that the respondent had not yet put such machinery to use on 1-4-2004 when such Cenvat credit was taken. A show cause notice dated 28-4-2005, therefore, came to be issued in which it was stated, inter alia, that to avail remaining 50% Cenvat credit, the assessee ought to have put the machinery to use. The laboratory itself as per the Engineer s certificate was set up on 13th August, 2004. The credit, therefore, could not have been taken on 1-4-2004. Reference was made to R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rected reversal of Cenvat credit, which according to him was wrongly taken. He, however, permitted the respondent to avail such credit as on 13-8-2004. He charged interest under Section 11AB of the Act for the period from 1-4-2004 to 13-8-2004 and imposed penalty of ₹ 5,000/- under Rule 13(1) of the Rules. Against such order, the respondent approached the Tribunal. The Tribunal by the impugned judgment, as noted above, allowed the appeal. The Tribunal relied on its earlier decision in the case of Ispat Industries Ltd. v. C.C.E., Raigad, 2006 (199) E.L.T. 509 and held that the word use has to be treated as meaning as available for use of the manufacturer. 5. Before us, counsel for the Department submitted that Rule 4(2) of the Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l goods are cleared as such in the same financial year. (b) The balance of Cenvat credit may be taken in any financial year subsequent to the financial year in which the capital goods; were received in the factory of the manufacturer, if the capital goods, other than components, spares, and accessories (refractories and refractory materials, moulds and dies) and goods falling under d\heading No. 68.02 and sub-heading No. 6801.10 of the First Schedule to the Tariff Act, are in the possession and use of the manufacturer of final products in such subsequent years. Illustration - A manufacturer received machinery on April 16, 2002, in his factory. Cenvat of two lakh rupees is paid on this machinery. The manufacturer can take credit upto a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e (2) of Rule 14, the Legislature has advisedly used the expression are in the possession and use of the manufacture of final products in such subsequent years . Stress, therefore, is on the capital goods being in possession and use of the manufacturer for the purpose of final product in such subsequent year when the remaining 50% credit is sought to be availed. We do not find that such rule ever insisted that such capital goods must have been put to use for the purpose of manufacture of final product. Had that been the intention of the Legislature, the language used in clause (b) of Rule 4(2) would have been differently worded. In essence, therefore, to avail 50% remaining credit, such goods should be in possession and use of the manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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