TMI Blog2017 (12) TMI 763X X X X Extracts X X X X X X X X Extracts X X X X ..... ith regard to input service tax credit proportionate to the credit in regard to trading, case remanded back to the original authority to determine proportionate cenvat credit relating to trading which is ineligible and with regard to the remaining quantity which is consumed as captive consumption, the appellants are entitled to input service tax credit - matter on remand. Penalty u/r 15 of CCR read with Section 11AC of CEA - Held that: - appellants have informed the audit party that they have informed the Department vide their letter dt. 25/05/2010 and 04/06/2010 that they are owning the crusher unit which is functioning away from the manufacturing unit - also, availing and utilising cenvat credit was truly and fully reported in the mont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- 2.1. Briefly the facts of the present case are that the appellants are manufacturers of cement, concrete blocks falling under chapter 68 of the CETA, 1985 and are availing the benefit of CENVAT credit of duty paid on inputs, capital goods and input services. During the course of verification of records of the appellant, it was noticed that they had availed CENVAT credit of duty paid on capital goods / spares in respect of capital goods installed at their crusher unit located at a distance of about 25 km from their factory. The crusher unit is installed at the quarry of the appellant which was acquired by them in January 2010. The crusher unit supplies grit etc. which are non-excisable items to their manufacturing unit an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules, 2004. 2.3. After considering the submissions of the appellant, the original authority confirmed the demand under rules 14 of CCR read with proviso to Section 11B of the CEA along with appropriate interest and also imposed equal penalty under Rule 15 of CCR read with Section 11AC of the CEA. Aggrieved by the said order, appellant filed four appeals before the Commissioner(Appeals) who vide the impugned order rejected the appeals filed against Order-in-original No.5/2014 dt 29/01/2014 and No.16/2013 dt. 21/08/2013 and appeals filed against Order-in-original No.2/2014 dt. 03/03/2014 and No.01/2014 dt. 14/02/2014 are partly allowed to the extent of setting aside the penalty imposed on the appellant under Rule 15 of the CCR read with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal in the case of National Aluminium Co. Ltd. Vs. CCE, Madras [1997(94) ELT 409 (Tri. Del.LB)) and J.K. Udaipur Udyog Ltd. Vs. CCE, Jaipur [2002(147) ELT 996 (Tri. Del.)] and Vikram Cement Vs. CCE, Indore [2006(194) ELT 3 (SC)]. 4.2. He also referred to CBEC Circular dt. 25/09/2002 and submitted that the credit is not to be denied on capital goods used in the manufacture of exempted intermediate goods which are used captively in the manufacture of finished goods chargeable to duty. He also submitted that Rule 6 of CCR does not put any restrictions for taking credit of duty paid on capital goods and spares used in the manufacturing of exempted intermediate goods which are used both captively in the manufacture of finis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cement factory, Modvat/Cenvat credit on capital goods will be available to the assessee. On the other hand, if the mines are not captive mines but they supply to various other cement companies of different assessees, Modvat/Cenvat credit on capital goods used in such mines will not be available to the concerned assessee under the appropriate Modvat/Cenvat Rules. The matters are remanded to the respective original authorities for decision only on the above issue. 5.2. He further submitted that in view of the judgment of the Hon ble Supreme Court in the case of Vikram Cement, learned Commissioner(Appeals) has relied upon the said judgment which clearly held that if the mines are not captive mines but they supplied to various other cem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th regard to the remaining quantity which is consumed as captive consumption, the appellants are entitled to input service tax credit. 7. As far as imposition of penalty under Rule 15 of CCR read with Section 11AC of CEA is concerned, I find that the appellants have informed the audit party that they have informed the Department vide their letter dt. 25/05/2010 and 04/06/2010 that they are owning the crusher unit which is functioning away from the manufacturing unit. I also find that availing and utilising cenvat credit was truly and fully reported in the monthly ER1 returns. In view of this, suppression cannot be invoked and penalty cannot be imposed. Therefore I drop the penalty under rule 15 of CCR but as far as interest liability, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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