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2014 (10) TMI 129 - AT - Central ExciseDenial of CENVAT Credit - Capital goods - 100% credit availed in the first year - Held that:- There being no dispute as to eligibility to avail Cenvat Credit on capital goods, the contravention that has arose is only in respect of the availment of 50% in the credit in the same year instead of next year needs to be condoned. At the same time, the appellant is required to pay appropriate interest on the amount of such credit availed by him in the same financial year. On a specific query from the bench, it was pointed that the appellant has already paid the appropriate interest on the excess availed Cenvat Credit. Ld. Departmental Representative does not dispute the payment of interest. Since the appellant has already compensated the Central Government by paying the interest on the amount of excess Cenvat Credit availed by him; which was eligible to be availed by him in subsequent year, the question of recovery of the Cenvat Credit of the 50% availed by them in the same financial year does not arise. As regards the penalties imposed by the lower authorities, justification given by the appellant that the availment of total Cenvat Credit of the duty paid on the capital goods was inadvertent as the capital goods in question was parts of oxygen plant and different valves seems to be correct as there could be a confusion as to these capital goods may be consumables. Since there is no malafide that could be attributed to such availment of credit nor does the records reveal anything to hold a view against appellant, I am of the view that the penalty imposed on the appellant is unwarranted and needs to be set aside. interest liability which is paid by the appellant is correct, while the Cenvat Credit availed by the appellant is also held to be correct and the penalties imposed are set aside. - decided in favour of assessee.
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