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2022 (3) TMI 452 - AT - Central ExciseRecovery of CENVAT Credit - capital goods though received and installed before the manufacture of a product earlier was exempted - availability of credit when the production started become dutiable - case of the department is that since the capital goods were received before 01.03.2011 and at that time the product “Maaza” was exempted - HELD THAT:- From Rule 6(4) of Cenvat Credit Rules, 2004, it is clear that Cenvat Credit shall not be allowed on capital goods which are used exclusively in the manufacture of exempted said goods. As per the facts of the present case, though the capital goods were received during the period 13.10.2010 to 28.02.2011 but as per submission of the appellant the trial production on said capital goods for manufacture of goods namely “Maaza” was undertaken on 14.03.2011 and commercial production of the said goods was commenced on 29.03.2011 with this fact it clear that since this machine was not used prior to 14.03.2011 for manufacture of any goods, it cannot be said that the said machine was used exclusively for manufacture of exempted goods. It is the contention in the show cause notice as well as in the impugned order that when the capital goods in question was received, the appellant was engaged in the manufacture of exempted goods however it is not clear whether the said capital goods were used in the manufacture of exempted goods - even if the goods per se were exempted during the receipt and installation of the capital goods but if the said capital goods were not put to use for manufacture of any exempted goods it cannot be said that the said capital goods were used exclusively for manufacture of exempted goods in terms of Rule 6(4) of Cenvat Credit Rules, 2004. In the fact of the present case the capital goods even though receipt earlier but when it started manufacturing the goods were dutiable i.e. from 01.03.2011. In this position, it appears that the capital goods on which the cenvat was claimed by the appellant was never used exclusively for manufacture of exempted goods. However, since the adjudicating authority has decided the case only on the basis that at the time of receipt of capital goods the product was exempted, therefore, the fact regarding commencement of such capital goods and the status of finished goods manufactured from that capital goods whether the same was dutiable or exempted needs to be verified. Penalty on Shri Amit Radheshyam Gupta in terms of Rule 26 of Central Excise Rules, 2002 - HELD THAT:- The issue involved is of interpretation of Cenvat Credit Rules, 2004 hence there is no malafide involved. Therefore, the personal penalty in this case cannot be imposed on the employee of the appellant's company. The impugned order is set aside and the matter remanded to the adjudicating authority for passing a fresh order after giving sufficient opportunities to the appellant. - Appeal allowed by way of remand. The matter deserves to be re-considered
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