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2017 (1) TMI 801 - AT - Central ExciseCENVAT credit - capital goods - whether Cenvat Credit on capital goods is allowable or eligible - (a) only after the production from those capital goods commences or (b) on the day the said goods are installed in the factory premises or, (c) on the day the goods are received in the factory premises for intended production of dutiable final products? - Held that: - Cenvat credit has to be determined on capital goods on the date of receipt that is as and when, the said goods are received in the factory of production along with evidence of duty paying documents. Whether the Cenvat Credit taken lawfully under Cenvat Credit laws on the receipt of capital goods in the factory can be denied later on at a subsequent stage, when the final product becomes exempted? - Rule 6(4) of CCR, 2004 - the said ruling have two clauses. The first clause provides that “no Cenvat Credit shall be allowed on capital goods, which are used exclusively in the manufacture of exempted goods or in providing exempted services" thereafter in 2nd Clause, it is provided that - "other than the final products, which are exempt from the whole of the duty of Excise leviable thereon under any notification when exemption is granted based upon the value or quantity of clearance, made a financial year". Held that: - Rule 6(4) does not debar taking of Cenvat Credit on capital goods, which are used in the manufacture of final products, although taxable, but exempt from the whole of duty of Excise under any notification when exemption is granted based upon the value or quantity of clearances - In the instant case, biscuits are normally taxable under the tariff but have been exempt vide N/N. 22/2007-CE dated 03.05.2007 with respect to the value of the product and/or MRP. Thus, the assessee falls in the second clause of Rule 6(4), which provides an exception, and as such, the credit is available on capital goods, for output, which are normally taxable but exempt under notification. CENVAT credit rightly taken and utilised - appeal allowed - decided in favor of assessee.
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