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2017 (12) TMI 763 - AT - Central ExciseCENVAT credit - capital goods not installed in factory - crusher unit is installed at the quarry of the appellant - Rule 3(1) of CCR, 2004 - denial of credit on the ground that capital goods / spares which have not been installed in their factory but elsewhere - Held that: - crusher unit is located 25 km away from the factory - the geographical distance does not make much difference as has been held in the case of National Aluminium Co. Ltd. Vs. CCE, Madras [1997 (6) TMI 95 - CEGAT, NEW DELHI] - but since in this case, the appellant has supplied surplus quantity to others and therefore they have indulged in trading activity also, therefore with regard to input service tax credit proportionate to the credit in regard to trading, case remanded back to the original authority to determine proportionate cenvat credit relating to trading which is ineligible and with regard to the remaining quantity which is consumed as captive consumption, the appellants are entitled to input service tax credit - matter on remand. Penalty u/r 15 of CCR read with Section 11AC of CEA - Held that: - appellants have informed the audit party that they have informed the Department vide their letter dt. 25/05/2010 and 04/06/2010 that they are owning the crusher unit which is functioning away from the manufacturing unit - also, availing and utilising cenvat credit was truly and fully reported in the monthly ER1 returns. In view of this, suppression cannot be invoked and penalty cannot be imposed - penalty set aside. Appeal allowed in part and part matter on remand for quantification.
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