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TMI Blog2018 (2) TMI 1387X X X X Extracts X X X X X X X X Extracts X X X X ..... r expanded their manufacturing process by adding a distillery facility adjacent to the sugar mill. For setting up the distillery they have procured various capital goods and availed input services also. The dispute in the present appeal relates to their eligibility to Cenvat Credit for the capital goods as well as such input services. The appellant availed such credit claiming that the distillery unit is independently recognized factory by various authorities and the same is not availing area based exemption availed by sugar unit. The revenue contested such claim and initiated proceedings against the appellant to demand and recover the credit availed on such capital goods and input services. The Original Authority held that the appellant be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the normal period from date of full knowledge of the Department regarding the manufacturing facility and putting up of distillery unit by them. Thus, he contested the proceedings both on limitation as well as on merit. 4. The Ld. AR submitted that the Revenue will recognize the appellant as one licensed registrant only. The appellant did not apply and take registration for distillery unit which will make them recognizable as a separate assesees for these units. In the absence such legal recognition it is not possible for the lower authority to allow any credit under Cenvat Credit Rules as the final products are not paying or liable to pay Central Excise Duty. Regarding the appellants payment of duty on certain products manufactured and cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ased exemption. Admittedly, the lower Authorities recorded that various products manufactured in the distillery unit are not excluded from the area based exemption. Hence, we find the contradiction in the approach by the Revenue while denying the credit on capital goods and input services which were admittedly used in setting up and further manufacture in distillery unit. This aspect requires a fresh consideration based on the analyses made above. 7. In view of the above we note that the impugned order as it stands cannot be sustained. The issue relating to the recognition of distillery unit and sugar unit as separate entities for the purpose of Central Excise and Cenvat Credit Rules requires a fresh consideration. The appellant shall be p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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