TMI Blog2011 (3) TMI 1435X X X X Extracts X X X X X X X X Extracts X X X X ..... demand prior to 17-2-2008 is prima facie time barred, appellants to deposit the amount in relation to the credit sought to be availed on or after 17-2-2008 till October 2008. - E/3584/2010 - 395/2011-EX(PB) - Dated:- 18-3-2011 - Justice R.M.S. Khandeparkar, Shri Rakesh Kumar, JJ. REPRESENTED BY : Shri Vikrant Kakaria, Advocate, for the Appellant. Shri R.K. Verma, DR, for the Respondent. [Order per : Justice R.M.S. Khandeparkar, President (Oral)]. Heard the learned Advocate for the appellants and DR for the respondent. 2. This is an application which has been filed in an appeal arising from order dated 12-8-2010 passed by the Commissioner, Ludhiana. By the impugned order the cenvat credit amounting to Rs. 1,77,10,796/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eof is converted into denatured spirit. To manufacture the denatured spirit from the spirit, no plant or machinery is required. The only process involved in manufacture of denatured spirit is in the form of mixing of denatured like Acetone, Benzene with the spirit in a loaded tank. Thus, entire machinery in the plant used by the appellants is being used exclusively for the manufacture of spirit. In the background of these facts, the department has sought to deny the credit which was availed by the appellants on the capital goods used in the manufacture of the spirit. 7. The contention sought to be canvassed on behalf of the appellants however is that the manufacture of denatured spirit from the molasses is a continuous process and merely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f denatured spirit, no machinery is required and the input for manufacture of denatured spirit is the spirit itself which is the intermediate product, and entire machinery which is sought to be used is essentially used for the manufacture of such spirit, the contention that the capital goods are used in the manufacture of the denatured spirit cannot be accepted. 9. The circular which is issued by the Board rather than lending any assistance to the contention sought to be canvassed on behalf of the appellants justifies the view taken by the department. It is undisputed fact and confirmed by the circular as well as by the decision of the Tribunal in the case of Sudarshanam Spinning Mills that pursuant to the introduction of Cenvat Credit Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty paid on such goods can be utilised for payment of duty on the final product. 12. As far as the decision of the Tribunal in Sudarshanam Spinning Mills is concerned, it was specifically observed in para 8 that Rule 57R(2) makes it clear that intermediate products have come into existence, cannot be a reason to vary or deny benefit of modvat credit on the capital goods, provided the final product is dutiable . Since the period in question is from June 2005 to October 2008 and is governed by the Cenvat Credit Rules, 2004 and there being no provision corresponding to Rule 57R(2) in the old Rules, the decision in Sudarshanam Spinning Mills can be of no help to the appellants. 13. As far as the decision of the Chhattisgarh High Court in H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose as to when the audit report was prepared and when the inspection was carried out. Undisputedly, the period involved from June 2005 to October 2008, yet show cause notice was issued on 16-2-2009. It is difficult to accept the plea that the department had no knowledge about the process of manufacture of denatured spirit. It is not the case of the department that regular statutory records were not submitted by the party or that there was failure on the part of the appellants in submitting regular statutory records. In such circumstances the appellants are justified in making grievance about invocation of extended period of limitation. 16. For the reasons stated above, therefore, though on merits, we do not find any prima facie case made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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