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TMI Blog2014 (5) TMI 790X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee has been allowed by holding that the order passed by the Commissioner of Central Excise & Customs, Belgaum dated 1-10-2004 in Order-in-Original No. 19/2004 is liable to be set aside and there is no justification for imposing equal penalty. 2. The material facts leading up to this appeal are as follows : The respondent-assessee is engaged in the manufacture of gaseous and liquid Oxygen, Nitrogen and Argon falling under Chapter 28 of the Central Excise Tariff Act, 1985 and have been working under 'Self Assessment Procedure' which is a liberalised version of 'Self Removal Procedure'. They had availed the facility of Modvat/Cenvat credit on inputs and capital goods. When the Officers of the Bellary Preventive Unit visited the resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner asking them to show cause as to why the excess Cenvat credit availed to the extent of Rs. 1,69,10,573/- should not be recovered under Rule 57AH of the Rules read with proviso to Section 11A(1) of the Central Excise Act, 1944 (hereinafter referred to as the 'Act'); why interest under Section 11AB should not be demanded; why penalty under Section 11AC of the Act should not be levied and further, why penalty should not be imposed under Rule 173Q of the Rules. After considering the reply, the Adjudicating Authority vide Order-in-Original No. 13/2002 passed an order dated 2-9-2002 confirming the demand of Rs. 1,69,10,576/- being the amount of irregularly availed under Rule 57AH of the Rules read with proviso to Section 11A(1) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s after 1-4-2000 the Cenvat credit and imposition of penalty of 100% under Rule 57AB of the Rules was also not justified. The CESTAT also held that provisions of Rule 57AC(2)(c) of the Rules is applicable and since under the Cenvat scheme, no restriction of credit had been made, the assessee was right in availing the entire credit in two stages and the impugned order is not legal and proper; and that the entire issue is one of interpretation and there is no justification in imposing equal penalty. Accordingly, the CESTAT allowed the appeal. Being aggrieved by the said order passed by the CESTAT, this appeal is filed by the Revenue. 3. This appeal has been admitted to determine the following substantial questions of law in this appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id two decisions. 6. We have given careful consideration to the contentions of learned counsel appearing for the appellant and scrutinised the material on record. 7. The substantial questions of law as to whether the assessee can claim Cenvat credit pursuant to the provisions of Rule 57AC of the Rules in respect of the goods received prior to 1-4-2000 and installed after date in view of the inclusion of the provisions of Rule 57AC of the Rules inserted on 3-5-2000, has already been considered by the Hon'ble Supreme Court in M/s. Saurashtra Chemicals case cited supra. The scrutiny of the material on record in the present case would clearly show that the capital goods were received by the assessee prior to 1-4-2000, but they had n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 50% is not eligible to be availed in the subsequent years. 8. In view of the above said decision, the substantial questions of law have to be answered in favour of the revenue and against the assessee and the order passed by the CESTAT is liable to be set aside and Cenvat credit allowed subsequent to the assessment year 2001-2002 has to be set aside. Accordingly, we answer the substantial questions of law in favour of the revenue and against the assessee. In view of the said finding, the assessee is liable to pay the penalty and interest which would consequently follow on the recovery of irregular availment of Cenvat credit. 9. Accordingly, we allow the appeal and set aside the order dated 7-2-2007 passed by the CESTAT in Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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