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2006 (1) TMI 411 - CESTAT, CHENNAICenvat/Modvat - Capital goods - Imposition of Penalty - Notification 70/03-C.E. (N.T.), are clarificatory and retrospective - HELD THAT:- There is no dispute regarding the status of moulds and dies, which are admittedly capital goods. Clause (b) of sub-rule (2) of Rule 57AC clearly covers the subject matter of this appeal. Admittedly, the capital goods as such were not in the possession and use of the manufacturer in 2001-2002 when the 50% balance credit in question was taken. Hence as rightly held by the lower authorities, the assessee was not entitled to take balance 50% of Cenvat credit on the moulds and dies in question. Rule 4(2)(a) lays down that up to 50% of Cenvat credit on capital goods received in the factory in a given financial year could be taken in the same year. Thus, the assessee seems to have acted under a bona fide belief that they are entitled to take balance credit in the subsequent financial year. This situation does not call for invocation of penal provisions against them. Hence I am of the view that the lower authorities should not have imposed any penalty on the assessee. In the result, it is held that the credit in question is not admissible to the appellants, but no penalty is imposable on them. Accordingly, the impugned order is sustained except in respect of imposition of penalty. The appeal is accordingly disposed of.
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