9911796707
TMI Blog2014 (9) TMI 366X X X X Extracts X X X X X X X X Extracts X X X X ..... use" of the manufacturer and whether the Tribunal ought to have held that for the purpose of taking balance amount of Cenvat credit under Rule 4(2)(b) of the Cenvat Credit Rules, 2002 in the financial year subsequent to the year in which capital goods are received, such goods should not only be in possession but should also be in actual use?" 2. The issue arises in the following factual background. Respondent, Indian Oil Corporation, a public sector undertaking had purchased certain machinery for setting up a laboratory for its use. As per the Cenvat Credit Rules, 2002, ('the Rules' for short), 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 res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment, the Cenvat Credit Rules, 2004 introduced with effect from 10-9-2004 removed the word "use" from Rule 4(2) of the Rules. 4. The adjudicating officer, however, was not convinced. He was of the opinion that in terms of Rule 4(2) of the Rules, the respondent was entitled to avail 50% credit during the year of acquisition of the machinery whereas remaining 50% could be availed only upon its use in manufacture of the final product. In the present case, since the laboratory was constructed only on 13-8-2004, availment of Cenvat credit with effect from 1-4-2004 was not permissible. He, therefore, directed reversal of Cenvat credit, which according to him was wrongly taken. He, however, permitted the respondent to avail such credit as on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipt of the inputs in the factory of the manufacturer. Sub-rule (2) pertains to condition on which Cenvat credit could be taken on capital goods and reads as under : "(2) (a) The Cenvat credit in respect of capital goods received in a factory at any point of time in a given financial year shall be taken only for an amount not exceeding fifty per cent of the duty paid on such capital goods in the same financial year : Provided that the Cenvat credit in respect of capital goods shall be allowed for the whole amount of the duty paid on such capital goods in the same financial year if the said capital goods are cleared as such in the same financial year. (b) The balance of Cenvat credit may be taken in any financial year su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods are received as long as such goods are in possession and use of the manufacturer of final product in such subsequent years. 7. In the present case, admittedly, the capital goods were received during the financial year 2002-2003. 50% credit 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. 8. We find that under clause (b) of sub-rule (2) of Rule 14, the Legislature has advisedly used the expression "are in the possession and use of the manufacture of final ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
