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TMI Blog2011 (3) TMI 758X X X X Extracts X X X X X X X X Extracts X X X X ..... the Adjudicating Authority has been dismissed. The Additional Commissioner, Jalandhar by its order dated 18th December 2003 has disallowed the Cenvat credit to the tune of Rs. 20,84,742/- while confirming demand of Rs. 14,70,206/- alongwith the interest and penalty of Rs. 20,84,742/- against the appellants. 2. The appellants are engaged in manufacture of cotton yarn classifiable under Chapter 52 and also availed Cenvat credit on the capital goods. The appellants accordingly availed Cenvat credit to the tune of Rs. 10,55,996/- during the period from September 2001 to March 2002 being fifty per cent of the total credit of Rs. 20,84,742/- pertaining to the capital goods received by them during the period from April 2000 to September 2000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of law which are otherwise applicable to the credit earned on the inputs. Since the credit in question was earned in relation to the duty paid on the capital goods and there being no provision in the excise law and rules made thereunder for lapsing of such credit merely on the ground of surrender of registration certificate or on the ground of availing the exemption benefit under a notification granting such exemption based on value or quantity of clearances made in a financial year, according to the learned advocate the authorities below erred in denying the credit and confirming the demand against the appellants. In that regard attention was drawn to the provisions of law comprised under Rule 57AC, 57AD and 57AG of the erstwhile ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had lawfully surrendered the said registration. 6. It is also not in dispute that during the period from April 2000 to September 2000 the appellants procured capital goods and in respect of the duty paid thereon earned the credit to the tune of Rs. 20,84,742/- and considering the provisions of law in force at the relevant time in terms of Rule 57AC were entitled to avail fifty per cent of the said credit for the financial year in which it was earned and the balance fifty per cent in any subsequent financial year. It is also undisputed fact accordingly prior to the surrender of registration certificate they had to their account such credit earned in relation to the capital goods as was disclosed by them in their RG register. It was the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t it nowhere applies to the credit earned out of duty paid on the capital goods. It only relates to the credit availed from duty paid on inputs. In fact, the DR also has fairly not disputed the said contention. He has, however, submitted that the logic behind the said rule would also apply to the credit earned from the duty paid on capital goods as has been held by the lower authorities. It is difficult to accept this contention on behalf of the Department. 9. The Rule 15AC(2)(a) (sic) provides that the Cenvat credit in respect of capital goods received in a factory at any point of time in a given financial year shall be taken only for an amount not exceeding fifty per cent of the duty paid on such capital goods in the same financial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rances of such final product in a financial year. 11. We have not been pointed out any other provision which could deal with the subject of lapsing of credit earned in relation to the duty paid on capital goods nor a provision which could result in denial of benefit of credit in balance at the time of surrender of the registration. Taking into consideration the above referred provisions of law readwith Rule 57AG(2) it would apparently disclose that Rule 57AG(2) nowhere relates to the credit earned from the duty paid on capital goods but is essentially restricted to the credit earned from the duty paid on inputs and, therefore, the authorities below clearly earned in applying the logic behind the said Rule 57AG(2) to the credit earned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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