TMI Blog2014 (6) TMI 386X X X X Extracts X X X X X X X X Extracts X X X X ..... this benefit from March 2008 - Held that:- even though the machine is part and parcel of block making plant, its utility is basically for finishing pavers only. Therefore, it cannot be said that Department was wrong in entertaining a view that CENVAT credit in respect of shot blasting machine and the eligibility for the same can be considered separately. - Decided against the assessee. Regarding subsequent use in dutiable goods - Held that:- Appellant took the credit in September 2008 whereas the clearance of dutiable product started from March 2009. - at best, they can be asked to pay the interest which is applicable for the period from September 2008 to March 2009 when they started to manufacture goods which suffered duty. - Otherwise, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cuments covering the importation separate price in respect of the shot blasting machines was not available and reverse the credit. Appellants thereafter ascertained the price of the shot blasting machine and calculated the duty credit attributable to the machines and reversed the same. However, they filed refund claim to take back the credit on the ground that the shot blasting machine was part of composite block making plant and cannot be considered as separate item and further they were eligible for the credit since from March 2009 they were paying duty on the pavers also. 2. In the proceedings before the lower authorities, the contention that the plant imported by them was a composite one and shot blasting machine was part of the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or ensuring that the pavers are not slippery and are not smooth faced and the shot blasting machine ensures this and such requirement is only in respect of pavers. Therefore, even though the machine is part and parcel of block making plant, its utility is basically for finishing pavers only. Therefore, it cannot be said that Department was wrong in entertaining a view that CENVAT credit in respect of shot blasting machine and the eligibility for the same can be considered separately. 6. As regards eligibility, the question arises whether the credit has been correctly denied on the ground that shot blasting machine was used in the manufacture of exempted goods viz. pavers. Admittedly, pavers were exempt if more than 25% slag was used as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is used in the production of film. Their intention was not to produce granules to be cleared on exemption but to produce granules used in the manufacture of film but only in the trial period they could not produce granules of requisite quantity and had to clear them under exemption and that the usage of the machine is to be seen with regard to its working life and not utilization in a limited specific period. The respondent assessee has, therefore, debited the credit taken and subsequently, again took credit of duty paid on the machine. The learned Commissioner was, therefore, of the view that the issue was squarely covered by the decision of M/s. Kailash Auto Builders (supra). While confirming the decision of the Commissioner (Appeals), t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearing the same without payment of duty and therefore as claimed by Revenue, capital goods were used only for exempted goods. In the present case also, at the time of receipt of the capital goods, the appellants used it only for pavers which were exempt since they were using 25% of slag furnace. From March 2009, they stopped using furnace slag and started paying duty. What emerges from Gujarat Propack case and other cases and also from the present case is that at the time of receipt of capital goods if an assessee is availing conditional exemption, the credit cannot be denied only on that ground. An assessee has the freedom to avail the conditional exemption or pay duty. Such freedom is not available when the goods are unconditionally exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xperimenting and tried different methods and under such circumstances and the fact that they did not pay the duty on the pavers during the trial period would not debar them from availing the duty and if when the regular commercial production started, they started paying duty. Since the issue is covered by the decision of the Hon ble Gujarat High Court, I do not consider it necessary to going into this aspect since there is no verification by both the lower authorities as to whether the claim that commercial production started only from March 2009 is correct or not and the implications on the demand. If it is considered that the decision of the Hon ble Gujarat High court in the case of Gujarat Propack would not apply, the second issue become ..... X X X X Extracts X X X X X X X X Extracts X X X X
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