TMI Blog2013 (2) TMI 669X X X X Extracts X X X X X X X X Extracts X X X X ..... o be determined at the time of receipt of such capital goods in the factory and if no cenvat credit was admissible on that date it cannot be allowed subsequently - Decided in favour of Revenue. - F.No. 198/652-653/2011-RA - 121-122/2013-CX - Dated:- 14-2-2013 - Shri D.P. Singh, Joint Secretary Shri R. Arumugam, Consultant, for the Assessee. ORDER These revision applications are filed by the applicant Commissioner of Central Excise, Salem against the order-in-appeal Nos. 26 27/2011-CX(SLM), dated 25-3-2011 passed by Commissioner of Central Excise (Appeals), Salem with respect to order-in-original Nos. 202 203/2010, dated 30-11-2010 passed by Assistant Commissioner of Central Excise, Salem-I Division. 2. Brief facts of the cases are that the respondents M/s. Arthanari Loom Centre (Textiles) Pvt. Ltd., Salem holders of Central Excise Registration are manufacturing and exporting 100% cotton yarn, dyed woven fabrics falling under tariff item 5208 41 30 of CETA, 1985 and effecting clearance of the goods for home consumption as well as export. They filed rebate claims for the duty paid on the goods exported during the period from June, 2010 to August, 2010. These c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital goods being only a deferred date of taking credit for administrative reasons, credit is eligible on the date of receipt of the goods. Thus the date of eligibility will be the date of receipt of the capital goods and as the date of receipt of the goods was between 23rd July, 1996 to 31st August, 1996 and as the said capital goods were out of the purview of the MODVAT Credit scheme, the Hon ble Tribunal has held that the appellant were not entitled to take MODVAT Credit on those capital goods. This case is very much identical to the case on hand. The assessee received the capital goods in question during the period when they availed full duty exemption on their final product. 4.4 In a similar case of CCE v. Sengunthar Spinning Mills, reported in 1998 (99) E.L.T. 409, it was held that the availability of Modvat credit on capital goods has to be determined at the time of receipt of capital goods in the factory and if no Modvat credit was available at that time, the question of subsequently making available any Modvat credit would not arise. This view has been further cemented by the Larger Bench, CESTAT, Mumbai in the case of Spenta International Ltd. v. CCE, Thane reported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04 and as such capital goods were used exclusively in the manufacture of exempted goods during the material period. Accordingly, Cenvat credit on such capital goods was not admissible to the assessee on the latter date, in view of the provisions of Rule 6(4) of the Cenvat Credit Rules and therefore, export of goods under claim for rebate on payment of the duty by way of debit in such CENVAT Credit is legally not correct and such debit cannot be considered as payment of duty and hence claim of rebate upon such debit cannot be considered. Therefore, rejection of the rebate claim of the assessee in this case by the Original Authority is legally correct and setting aside the order of the Lower Authority by the Commissioner (Appeals) in this case is legally not correct. 4.8 The Commissioner (Appeals) appeared to have erred in relying on the following six case laws but in all these cases, the issue involved are different from the issue involved in the instant case except in the case of ST Kottex Exports Pvt. Ltd. (i) Philips India Ltd - 2005 (191) E.L.T. 1028 (Tri.-Mumbai) (ii) Surya Prabha Mills Ltd. - 2002 (149) E.L.T. 929 (Tri.-Che.) (iii) Tamilnadu Petro Product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicant department vide their letter dated 14-12-2012 stated that : 6.1 Against the Commissioner s (Appeals) Order Nos. 26/2011 and 27/2011 both dated 25-3-2011, an appeal has been filed with the CESTAT, South Zonal Bench, Chennai on 23-6-2011, by the Department. The Hon ble CESTAT in the Final Order Nos. 1094-1095/2011, dated 26-9-2011 has dismissed both appeals as not maintainable as the Tribunal would have no jurisdiction to deal with these two appeals, the jurisdiction having been barred by Clause (b) of the first proviso to Section 35B of the Central Excise Act, 1944. And the CESTAT has also held that the department is at liberty to approach any other appropriate forum, if it is so advised. Under the circumstances the revision application has been filed under Section 35EE of the Central Excise Act, 1944. 6.2 The appeals with Hon ble CESTAT have been filed on time. Hence, the period of pendency with the Hon ble CESTAT i.e. from 23-6-2011 to 12-10-2011 has to be excluded in terms of Section 14 of the Limitation Act, 1963, since the appeals were filed with wrong Appellate Forum in good faith. In this regard the following are the case laws for considering the condonation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty held that the claimant were availing full duty exemption scheme from 6-6-2007 to 9-6-2010 and all the capital goods on which the credit had been taken were received prior to 10-6-2010 i.e. when they were availing full duty exemption in terms of Notification No. 30/2004-C.E., dated 9-7-2004. The did not pay duty on any clearances for the said period whether for export or for home clearance. But they had taken Cenvat credit of ₹ 2,045,725/- from 28-1-2006 to 4-6-2010 for the purpose of paying duty on export for the goods exported on 10-6-2010 which was ineligible in terms of sub-rule (4) of Rule 6 of Cenvat Credit Rules, 2004 for exempted goods. The adjudicating authority accordingly rejected the rebate claim. Commissioner (Appeals) held that in terms of Rule 4(2)(a) 4(2)(b) of Cenvat Credit Rules, 2004 credit in respect of capital goods received in the factory or in the premises of the provider of output service at any point of time in a given financial year can be taken for an amount not exceeding 50% and the balance of credit may be taken in any financial year, hence he accordingly allowed the appeal. Now the applicant department has filed this revision application on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... session of the manufacturer of final products, or provider of output service in such subsequent years. Government notes here that Rule 6(4) of the Cenvat Credit Rules, 2004 is a specific rule which apply when a manufacturer exclusively uses capital goods for manufacturing of exempted goods or in providing exempted services whereas the Cenvat Credit Rules 4(2)(a) 4(2)(b) ibid are the general Rules which provides the manner and method for allowing Cenvat credit. Hence Government finds much force in the contention of the department that if the capital goods are used exclusively in the manufacture of exempted products Cenvat credit will not be available to the manufacturer. Therefore the admissibility of Cenvat credit on capital goods has to be determined at the time of receipt of such capital goods in the factory and if no cenvat credit was admissible on that date it cannot be allowed subsequently as held in various case laws relied upon by the applicant department. 11. In view of above circumstances Government sets aside the impugned orders-in-appeal and restores the impugned orders-in-original. 12. The revision applications succeed in terms of above. 13. So, ordered. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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