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2022 (5) TMI 1301 - CESTAT MUMBAIRecovery of wrongfully availed CENVAT Credit - capital goods - manufacture of exempt products only or not - Rule 6(4) or Rule 6(5) of Cenvat Credit Rules, 2004 - incorrect classification of Jointing Compound - interpretation of Rule 6 (4) of CENVAT Credit Rules, 2004 - HELD THAT:- Even if at the time of the receipt of the capital goods, the finished goods manufactured and cleared by the appellant were exempt from payment of duty or attracted duty at “nil” rate, but subsequently the capital goods were utilized for manufacture and clearance of the goods on payment of duty, then the CENVAT credit in respect of such capital goods could not be denied subject to the restrictions as per the Notification No. 13/2016-CE (NT) dated 1.3.2016. In the terms of amendment made the capital goods should have been utilized for manufacture and clearance of goods on payment of duty within two years of the commercial operation of the capital goods. The facts as have been recorded by the Commissioner, admit that indeed these capital goods were utilized within the period of two years from the start of their commercial operations for manufacture and clearance of the finished goods on payment of duty. It is not even the case of revenue that throughout these capital goods were exclusively used for manufacture and clearance of finished goods exempt from payment of duty. As there is no denial of the fact that appellants have utilized theses capital goods for manufacture and clearance of the finished goods on payment of duty, in the manner as prescribed by the amended rule 6 (4) the CENVAT Credit could not have been denied. In view of this we do not intend to dwell on the issue of classification/ misclassification of the finished goods, which have been raised by the impugned order. Extended period of limitation - penalty - HELD THAT:- All the facts in respect of availment of CENVAT Credit on the capital goods, input services and the clearance of the finished goods were in the knowledge of the department throughout. Even if there were some interpretational issues the same cannot be said to be the reason for invoking the extended period. There is no position to sustain the impugned order on merits or on limitation - Since the demand do not sustain on merits and also on limitation, the confiscation and penalties imposed too cannot be sustained - appeal allowed - decided in favor of appellant.
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