TMI Blog2017 (1) TMI 801X X X X Extracts X X X X X X X X Extracts X X X X ..... s on the receipt of capital goods in the factory can be denied later on at a subsequent stage, when the final product becomes exempted? - Rule 6(4) of CCR, 2004 - the said ruling have two clauses. The first clause provides that “no Cenvat Credit shall be allowed on capital goods, which are used exclusively in the manufacture of exempted goods or in providing exempted services" thereafter in 2nd Clause, it is provided that - "other than the final products, which are exempt from the whole of the duty of Excise leviable thereon under any notification when exemption is granted based upon the value or quantity of clearance, made a financial year". Held that: - Rule 6(4) does not debar taking of Cenvat Credit on capital goods, which are used i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... final product becomes exempted. 2. The brief facts are that the assessee, Gokul Food Pvt. Ltd., is engaged in manufacture of Glucose biscuits and Cream biscuits falling under chapter Sub-Heading 19053100 of the first schedule to CETA, 1985. The assessee was manufacturing biscuits with their existing plant and machinery from before. From the records of the assessee, Revenue observed that during the month of March and April, 2007 the assessee had received new plant and machinery for installing new 180 ft. long x 1.2 M Indirect Oil Oven MK-II type, Certain parts of oven and other machines were purchased and bought from other manufacturers for using the same in the said oven. During the months of March 2007 and April 2007, the assessee also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led from the old Hall and was shifted to the new Hall adjacent to the new oven. All the capital goods acquired as detailed in para-11 of the SCN were put to use either in new oven or in old oven or both, after their installation in the new Hall. 2.1 Accordingly, it appeared to Revenue that the Cenvat Credit availed ₹ 17,97,968/- including cess is not available to the assessee as the capital assets newly acquired have been exclusively used in manufacture of exempted goods only. The Cenvat Credit utilised ₹ 8,85,312/- + ₹ 26,560/-, availed on such capital goods for payment of duty on clearance of biscuits (manufactured earlier from old plants machinery), for the month of March and April, 2007 have been irregularly utilize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Credit have been rightly taken when the goods were received in the factory of manufacture (when such goods manufactured by the appellant, were taxable) and their subsequent exemption, vide Notification dated 03.05.2007 is irrelevant for the purpose of taking Cenvat Credit. He has further held that once the Cenvat Credit is rightly taken, there is nothing wrong to its utilisation in payment of duty under the Cenvat Credit Rules. The Ld. Commissioner have relied on the larger Bench ruling o this tribunal in the case of Spenta International Ltd. Vs. CCE Thane, reported at 2007 (216) ELT 133 (Tri.-LB) , it was held that credit eligibility is to be determined with reference to dutiability of the final product on the date of receipt of capit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearances made in a financial year. 6. It is strongly contended by learned AR for Revenue that the Rule makes it absolutely clear, that Cenvat credit is not admissible, if same is used in the manufacture of final products, which are exempt from whole of the Central Excise duty. In the instant case, the new plant against which credit was taken, was installed after the final product i.e. biscuits became exempt and hence, the credit is not admissible to the party in terms of Rule 6(4) of CCR, 2004. 7. Heard learned counsel for the assessee, Mr. Kapil Vaish. 8. Having considered the rival contentions, I find that first of all Cenvat credit has to be determined on capital goods on the date of receipt that is as and when, the said goo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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