9911796707
TMI Blog2011 (3) TMI 1435X X X X Extracts X X X X X X X X Extracts X X X X ..... ting to Rs. 1,77,10,796/- has been disallowed and ordered to be recovered alongwith interest and has imposed equal amount of penalty. 3. The credit has been disallowed on the capital goods on the ground that the capital goods in question were exclusively used for manufacture of non-dutiable intermediate product and have no relation with the manufacture of the final product. 4. Learned Advocate for the appellants drawing our attention to Circular No. 665/56/2002-CX., dated 25-9-2002 and placing reliance in the decision of the Tribunal in the matter of CCE, Tiruchirapalli v. Sudarshanam Spinning Mills Ltd. reported in 2004 (167) E.L.T. 210 (Tri. - Chennai) and CCE, Chhattisgarh v. H.E.G. Ltd. reported in 2010 (260) E.L.T. 386 (Chh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... molasses is a continuous process and merely because major part of the intermediate product is cleared to the outside customers, that would not disentitle the appellants from availing the credit in relation to duty paid on the capital goods. 8. Rule 3 of Cenvat Credit Rules clearly entitle a manufacturer of a final product to avail the credit in relation to the duty paid on capital goods received in the factory of manufacture of the final product. In the case in hand it is not in dispute that as far as the capital goods are concerned, they are used for the manufacture of the product namely spirit, 98% of which is cleared to the outside customer and 2% thereof is captively used. However, before the same being captively used, it is store ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat pursuant to the introduction of Cenvat Credit Rules, 2004, there is no provision therein corresponding to erstwhile Rule 57R(2) of the erstwhile Central Excise Rules. Once it is undisputed fact that there is no corresponding provision in that regard in the Cenvat Credit Rules, 2004 the contention sought to be canvassed on behalf of the learned Advocate for the appellant cannot be accepted. 10. Besides the circular specifically states thus :- "2. The matter has been examined by the Board. It is observed that although there is no provision in the existing Cenvat Credit Rules, 2002 corresponding to erstwhile rule 57R(2), the new rules have no provision barring the credit on capital goods used in the manufacture of exempt interm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llants. 13. As far as the decision of the Chhattisgarh High Court in H.E.G. Ltd. case is concerned, the Hon'ble High Court in para 22 has clearly observed that "we have no hesitation in holding that parts, accessories/spares of CPP installed in the factory premises would fall within the ambit of "capital goods" as contemplated under Rule 57-Q as user of electricity in the production of sponge iron is an integral part of manufacturing process". In other words there was no dispute that the electricity though is released for outside customer, it also formed integral part of the manufacturing process of the final product. Once use of any capital goods forms integral part of the manufacturing process of the final product, the credit earned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons stated above, therefore, though on merits, we do not find any prima facie case made out for waiver of the amount demanded under the impugned order, the impugned order does not disclose that the department was totally unaware of the fact that the appellants were availing the credit in relation to the duty paid on the capital goods even though same were not utilized for the manufacture of the final product and that the same were utilised in relation to the exempted intermediate product. Hence, the demand prior to 17-2-2008 is prima facie time barred. 17. Accordingly, we direct the appellants to deposit the amount in relation to the credit sought to be availed on or after 17-2-2008 till October 2008 alongwith interest thereon within ..... X X X X Extracts X X X X X X X X Extracts X X X X
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