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2023 (7) TMI 105 - AT - Central ExciseCenvat credit on capital goods - No credit was availed in the initial (first) year - Whole of the credit (100% credit) was availed in the subsequent year - contravention of Rule 4(2)(a) of Cenvat Credit Rules 2004 on the ground of nonavailment and utilization of Cenvat Credit in its initial period - N/N. 32/99-CE dated 08.07.1999 - time limitation - HELD THAT:- The due date of filing of monthly Returns and Refund claim for the month of April, 2007 was 7th of May 2007. Had there been any dispute of wrong availment of Cenvat credit, the department should have issued the impugned show cause notice by 7th of May, 2008, whereas, the show cause notice was issued on the appellants on 17th November 2008 after a lapse of more than one year from the date of submission of first ER-I return and Refund claim under Notification No.32/99-CE dated 08.07.1999 - the impugned order-in-Original dated 31.12.2009 is not sustainable on the ground of limitation and liable to be set aside. A plain reading of the provisions of Rule 4(2)(a) of the Cenvat Credit Rules, 2004 makes it clear that a manufacturer can take credit in the financial in which the capital goods are received for an amount ‘not exceeding 50% of the specified duty paid on the capital goods. The balance credit is permitted to be taken ‘in any financial year’ subsequent to the financial year in which the capital goods were received in the factory of manufacture’. There is neither restriction nor compulsion to avail and utilize Cenvat credit on capital goods in the initial year of receipt of capital goods. The Appellant at their discretion may or may not opt for avail and utilize the Cenvat credit on capital goods in the initial year. The contention of the department that the Appellant contravened the provisions of Cenvat credit by not utilizing 50% of the capital goods in the first years of its receipt is misconceived and not tenable in the eyes of law - the Appellant has not violated any provisions of the Cenvat Credit Rules, 2004, by foregoing the credit in the initial years of its receipt and availing the full credit in the subsequent year. There was no violation in the refund sanctioned to the Appellant - the impugned order is liable to be set aside on merit also - Appeal allowed.
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