TMI Blog2007 (9) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... athy from crude vegetable oil. At various stages of manufacture of refined oil vanaspathy, RHF receives Palm Fatty Acid Distillate (PFAD), wax and soap stock. They are removed to the nearby Acid Oil plant in the factory premises. (PFAD is also removed as such). In the Acid Oil plant they are processed into Acid Oil which is cleared on payment of duty. RHF availed Modvat/Cenvat credit on capital goods received for setting up the refinery and other manufacturing facilities in the factory during the material period. On a tentative finding that RHF was not entitled to avail credit of duty paid on capital goods installed in the refinery for clearing Acid Oil manufactured in a separate plant, department initiated proceedings by issuing a Show C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p of the plant and were not qualified to provide Modvat/Cenvat credit. 3. During hearing, the learned counsel appearing for RHF reiterated the grounds taken in the appeal. He showed us the ground plan of the factory of the assessee approved by the jurisdictional Superintendent. It covered the refinery and other facilities including the Acid Oil plant. As per statutory definition, capital goods are those used in the factory of the manufacturer. Therefore the impugned goods were capital goods envisaged in the Modvat/Cenvat rules and yielded credit. The Rule 57T declarations whenever filed by the assessee had shown Acid Oil as the final product. RHF vide its letter dated 27-12-2000, had intimated the jurisdictional Assistant Commissioner, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a fair distance between them. Refinery was the factory of the assessee. Acid Oil was not manufactured in the factory. The approval to the ground plan accorded by the jurisdictional Superintendent was incorrect and was not to be taken serious note of. Moreover, factory was not defined in the rules for the purposes of Modvat/Cenvat. As the impugned goods were installed in the refinery and no dutiable goods emerged in the refinery, RHF was not entitled to the credit demanded. He defended the impugned order as legal and correct. 5. We have carefully studied the rival submissions. The main dispute to be decided in this case is whether RHF was lawfully entitled to take credit of duty paid on capital goods in view of the provisions defining cap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed credit is legitimately due to the assessee. RHF had intimated the department in their 57T declarations whenever they were required to file them that the capital goods would be used in the manufacture of Acid Oil. Declarations in terms of Rule 173B, 57T, records and returns relating to availment of capital goods credit, RT12s, invoices etc., furnished to the Department from time to time had indicated that Acid Oil was being manufactured using the impugned capital goods and being cleared on payment of duty using Modvat/Cenvat credit. As per the impugned order, PFAD is also an Acid Oil. Therefore larger period cannot be invoked to recover the credit found to have been wrongly taken. There is no dispute that the assessee had filed classi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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