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TMI Blog2007 (8) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... t on the date of the receipt of the goods or the date of utilization eligibility of 50% credit." 2. The facts of the case are that the assessees are manufacturing socks falling for classification under CET sub-heading 6102.00 and were exempted from payment of duty prior to the 2003 Budget. The goods became dutiable only w.e.f. 1-4-2003. Certain capital goods were received by the assessees during June 2002 and September 2002 and installed in March 2003 and some of the capital goods were used in March 2003. Cenvat credit on the goods has been denied on the ground that final products (socks) were exempt at the time of receipt of capital goods, on the basis of the Tribunal's decision in CCE, Indore v. Surya Roshni Ltd. reported in 2003 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacturer of the final product shall be allowed credit of the duty paid on the capital goods. Sub- rule (1) of Rule 57Q mentions that the provisions of sub-section "AAAA" shall apply to goods described in the Table given below the sub-rule. Rule 57R(1) bars the availment of credit of the duty if the capital goods are used in the manufacture of final products on which no excise duty is payable. The credit is availed of as and when the capital goods are received by the manufacturer. When the impugned machine was received, it has been used in the manufacture of bulbs which were exempted from the payment of whole of the duty of excise leviable on them. The classification list may contain details of goods which are liable to pay duty. But it ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in "kept the option of availing the Modvat credit on capital goods in abeyance for about a year, till implementation of the third phase, namely, the fabric processing. The assessed submitted the required declaration under Rule 57T 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." In view of this, the Respondents are not entitled to Modvat credit. Accordingly, we set aside the impugned Order and allow the Appeal filed by the Revenue." 6. The relevance of the date of receipt of capita) goods for the purpose of availment of credit has already been recognised by the Tribunal in Grasim Industries Ltd. v. CCE, 2004 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the goods. In para 11, the Bench has agreed with the contention of the Revenue that Modvat credit must accrue on the goods on the date of receipt in the factory and not on the date of installation. (b) HEG Ltd. v. CE reported in 1998 (100) E.L.T. 133 (NRB -New Delhi) wherein it is held that Modvat credit on capital goods can be utilised from the date of receipt of the goods before its use in the installed plant. (c) Hindustan Cables Ltd. v. CCE, Bolpur reported in 2001 (137) E.L.T. 735 (ERB - Kolkata) wherein it was held that credit taken before installation of the goods is not deniable. (d) Hind Spinners Industries Growth Centre v. CCE reported in 1997 (96) E.L.T. 651 (NRB - New Delhi) wherein it Is held that Modvat credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old that there is no ground to interfere with orders passed by the authorities below and we uphold the same and reject the appeal." The civil appeal against this order was dismissed by the Supreme Court, as reported in 2005 (179) E.L.T. A38 (S.C.). 7. In the case of Binani Cement Ltd. v. CCE, 2002 (143) E.L.T. 577, the Tribunal held that vested right of taking credit arises on the date of receipt of the goods and that the date of installation of capital goods being only a deferred date of taking credit, for administrative reasons, credit is eligible on the date of receipt of the goods. In CCE v. Sengunthar Spinning Mills, 1998 (99) E.L.T. 409, it was held that the availability of Modvat credit on capital goods has to be determined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit Rules, which clearly stipulates that no credit shall be allowed on capital goods used exclusively in the manufacture of exempted goods. In other words, the ACE Timez decision discusses the manner in which credit to be availed as per Rule 4(2)(a) (b) and does not discuss eligibility in terms of Rule 6(4). Moreover, the ACE Timez decision does not consider the Tribunal's earlier decision in Surya Roshni and Grasim Industries . 10. In the light of the above discussion, we answer the reference by holding 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. 11. The papers are now returned to the referral Bench for further orders. (P ..... X X X X Extracts X X X X X X X X Extracts X X X X
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