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TMI Blog2023 (7) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... ding ten years from the date of commercial production. 3. A show Cause Notice dated 17.11.2008 was issued to the Appellant alleging that they had wrongly availed Cenvat credit on Capital Goods amounting to Rs.75,90,506/-, for the month of July 2008, in terms of Notification 32/99-CE dated 08/07/99, as amended. The Notice was adjudicated vide Order-in-Original dated 31.12.2009, wherein the demand of duty was confirmed along with interest and penalty equal to duty was imposed under Section 11AC of the Central Excise Act, 1944, read with Rule 25 of the Central Excise Rules. 4. The contention of the department was that the Capital Goods were procured by the Appellant in the years 2006 and 2007. However, as a matter of policy decision, the Appellant deferred to avail and utilize the Cenvat Credit on capital goods used in relation to manufacture of final products in the initial periods and proposed to avail the Cenvat Credit on capital goods in the subsequent years. The Appellant had submitted to the department ER-I returns, details of Cenvat Credit availed and utilized on inputs from time to time. Accordingly, the Appellant contended that the demand is barred by limitation as the inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturer of the final products for generation of electricity for captive use within the factory, [or in the premises of the job worker, in case capital goods are sent directly to the job worker on the direction of the manufacturer or the provider of output service, as the case may be]] 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 such capital goods are cleared as such in the same financial year : [Provided further that the CENVAT credit of the additional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act, [ * * * *] in respect of capital goods shall be allowed immediately on receipt of the capital goods in the factory of a manufacturer :] (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, or in the premises of the provider o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etion may or may not opt for avail and utilize the Cenvat credit on capital goods in the initial year. The contention of the department that the Appellant has contravened the provisions of Cenvat credit by not utilizing 50% of the capital goods in the first year is misconceived and not tenable in the eyes of law. 9. Further, the appellants relied on the ratio of the Tribunal's in the case of Keihin Fie Pvt.Ltd. Vs. CCE, Pune-III reported in 2007 (213) ELT 637 (Tri.-Mum.)], wherein it has been held as under: "Cenvat/Modvat - Capital goods - Restriction in availment of credit-Assessee did not avail Cenvat credit during first financial year in which the capital goods were received - Assessee availed 100% credit in next financial year - No specific rule which prohibits, in clear terms, availment of more than 50% Cenvat credit even during next financial year - Credit not tobe rejected - Rule 4(2)(b) of Cenvat Credit Rules, 2004/2004." 10. Further, the Appellants rely on the ratio of the decision in the case of Herbicure Pvt.Ltd., Kolkata Vs. CCE, Kolkata-VII reported in 2007 (216) ELT 216 (Tri.-Kol), wherein it has been held as under: "Cenvat/Modvat - Capital goods - Utilization ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on No.32/99-CE dated 08.07.1999. It is settled law that if the tax payer is within the terms of the exemption, he cannot be denied its benefit. 14. In the instant case, the Appellant submitted that being a new Industrial Unit they were eligible for exemption of duty paid by way of refund. The legislative intent was to provide fiscal incentive to those industrial units operating in the industrial backward areas of North East. Keeping in mind the objectives of the exemption notification, the department has to interpret the conditions of the exemption notification and should not interpret the same which defeats the legislative intentions. The Appellant rightly availed the utilized the Cenvat credit available in the material period and as a policy decision the Appellant has deferred the availment of Cenvat credit to the subsequent years which is allowed as per Cenvat Credit Rules, 2004. Such an act of the appellant is in no case a violation of the conditions of exemption notification as well as the provisions of the Cenvat Credit Rules, 2004. Therefore, the impugned Order-in-Original passed by the Ld.Commissioner, Central Excise, Guwahati is not sustainable. 15. The Ld A.R. for the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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