TMI Blog2010 (1) TMI 558X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the learned representative for the applicants that the applicants want to give further detailed submissions in support of the appeal, we refrain from disposing the appeal at this stage. 3. This appeal arises from the order dated 9th March, 2009 passed by the Commissioner of Central Excise, Chandigarh. By the impugned order, credit to the tune of Rs. 1,12,12,565/- ha been disallowed and ordered to be recovered from the applicants along with interest thereon and equal amount of penalty has been imposed. 4. The applicants are engaged in the manufacture of Cement Clinkers, Cement OPC and Cement PPC. The relevant period for the decision is from April, 2006 to April, 2007. During the relevant period, the applicants were availing benefit of Notification No. 50/2003-C.E., dated 10-6-2003, as amended, and effecting clearances of cement at nil rate of duty w.e.f. 3-5-2005. In terms of the provisions of law, no Cenvat credit is admissible on the inputs or capital goods used exclusively in the manufacture of exempted goods as Rule 6 of the Cenvat Credit Rules, 2004 in that regard is very clear. 5. The applicants under letter dated 7-3-2005 had informed the Department that on commen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esentative appearing for the applicants submitted that, the learned Commissioner grossly erred in failing to appreciate that Rule 6(4) of the Cenvat Credit Rules, 2004 would be applicable only in cases where the subject capital goods have been or are to be used exclusively and without any exception throughout their tenure/life span for the manufacture of only exempted final products, and that the capital equipments used in expansion are expected to have a life span of much more than ten years, and hence these capital gods would be used in the manufacture of dutiable cement after expiry of exemption period. Thus, during the life span of the capital goods, they would be used for the manufacture of both dutiable arid exempted goods, and hence the embargo under Rule 6(4) of the Cenvat Credit Rules, 2004 would not be applicable to such cases. He further submitted that, the learned Commissioner failed to appreciate the fact that the intention to use the impugned capital goods during their life span for the manufacture of both dutiable and exempted goods had already been conveyed to the Department under letter dated 7th March, 2005 and, therefore, it was within the knowledge of the Depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmined with reference to the dutiability of the final product on the date of the receipt of the goods or the date of utilization, after considering various earlier decisions in this regard of the Tribunal as well as the decision of the Apex Court in the matter of Commissioner of Central Excise v. Suryn Roshni Ltd., reported in 2003 (158) E.L.T. A273 (S.C.) and in the matter of Grasim Industries Ltd. v. Commissioner of Central Excise, 2005 (179) E.L.T. A38 (S.C.), held that, "cenvat credit eligibility is to be determined with reference to the dutiability of the final product on the date of receipt of capital goods". Obviously, therefore, the right of the manufacturer to avail the cenvat credit depending upon the dutiability of the final product for the period for which the manufacturer wants to avail the cenvat credit, has been clearly laid down in the said decision. In such circumstances, the contention that the manufacturer having made his intention clear to manufacture dutiable goods after the expiry of the exemption period and that on that count, even during the exemption period, the manufacturer would be entitled to avail the cenvat credit, cannot be accepted. 10. The decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he modvat scheme on capital goods and that there was no provision for prior permission for taking credit under the Rules. Therein it was observed that, the project was implemented by the manufacturer in September, 1998 by using both imported and indigenous machinery. Since the final product, at the end of the second phase, was non-dutiable, the assessee kept the option of availing the modvat credit on capital goods in abeyance for about a year, till implementation of the third phase, namely, the fabric processing. The assessee then submitted the required declaration under Rule 57-T of the Central Excise Rules with the clear intention that it shall be availing the credit on implementation of the third phase as the final product of third phase was dutiable. On implementation of the third phase, it became a composite mill and, therefore, was entitled to avail of the modvat credit facility which was kept in abeyance during the second phase of manufacturing operation. The facts clearly disclose that, during the period during which the manufacturer was not entitled to avail the modvat credit facility in accordance with the provisions of law, the facility was kept in abeyance. In other wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discloses that till April, 2008 the Department was not furnished with necessary de tails in relation to the availment of credit on inputs and capital goods by the applicants and definitely there was suppression of facts. This aspect, prima facie, does appear to have been considered by the Commissioner under the impugned order. Being so, on this aspect also, we do not find any, prima facie, case having been made out in favour of the applicants. 15. For the reasons stated above, we do not find any, prima facie, case having been made out for grant of stay of the impugned order. 16. As far as financial hardship is concerned, there is no case made out in that regard by the applicants, apart from contending that unless the pre deposit is waived, it would cause undue hardship to the applicants. The issue of financial hardship depends on the facts of each case. The party raising the issue of undue hardship has to plead and substantiate the same with necessary materials. We do not find any material in support of the plea of financial hardship. 17. For the reasons stated above, the application fails and is liable to be dismissed. However, as far as penalty amount is concerned, in our c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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