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TMI Blog2018 (2) TMI 1243X X X X Extracts X X X X X X X X Extracts X X X X ..... ). During the year 2008-09 the assessee had procured capital goods for use in the manufacture of car seats namely H-point Machine and Static Load Tester . However, the said machines were not installed within the factory of the assessee but within the premises of HLIPL, since the assessee did not have facilities for keeping them in air-conditioned atmosphere as was required. Appellant however availed Cenvat credit related to these machines amounting to Rs. 24,18,478/-. It appeared to the Department that since the capital goods were not installed in the premises of the assessee but in the premises of HLIPL which had separate Central Excise Registration, availment of credit thereof by the assessee was not in order. It was also noticed that app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On behalf of the assessee, Ld. Counsel Shri R. Parthasarathy submits that in respect of the demand for recovery of Rs. 24,18,478/- is being only made on the ground that the concerned capital goods were not installed in the premises of the assessee but installed in the premises of HLIPL. Ld. Counsel submits that assessee themselves were located within the premises of HLIPL. Further, the assessee and HLIPL had merged into a single entity w.e.f. 01.04.2009 as ratified by an order of the Hon ble High Court of Madras dated 10.06.2010 in Company petition No. 58 & 59/2010. Therefore, in any case, w.e.f. 01.04.2009 the said machines are deemed to be received and installed only in their factory premises. In fact, if the assessee had availed credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ong Ho Man had knowledge about the alleged mis-declaration of automated warehousing system under Chapter 84 instead of Chapter 94, however the impugned order has not adduced an evidence to show how the mis-declaration has been committed by Shri Hong Ho Man. In the circumstances, no penalty can be imposed under Rule 26 (1) on Shri Hong ho Man. 3. On the other hand, Ld. AR, Shri K. Veerabhadra Reddy, JC, supports the impugned order. He submits that Rule 2 (a) and Rule 3 (1) of CCR very clearly specify that the goods should be received and used in the factory in which Cenvat credit is taken. These are primary and substantial requirements for enabling availment of Cenvat credit. By corollary, without satisfying these conditions, credit cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule 2 (a) of Cenvat Credit Rules 2004, will require to be satisfied interalia that goods should be used in the factory of manufacture of final products . Strictly interpreting this provision would no doubt appear, at first light, that in respect of H-point machine and static load tester which were installed not in the premises of the assessee but in an adjacent unit of HLIPL, Cenvat credit would ordinarily not be available. However, it should also be kept in mind that the assessee stood merged with HLIPL w.e.f. 01.04.2009, and as a result both these premises became a common entity from that date. From the facts on record, it appears that the assessee has availed credit under cover of invoice dated 01.11.2008, which was around five months pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legislature has specifically inserted an Explanation to Rule 3 (1) of the Rules, which clarifies that a manufacturer or producer of final products shall be allowed Cenvat credit of additional duty of all goods falling under CTH 98.01. The takeaway from this Explanation is that once the goods are imported under CTH 98.01, irrespective of where the goods would be classifiable under CETH, they will become eligible for availment of the CVD portion as capital goods credit. The Explanation to Rule 3 (1) therefore amplifies an exception to the proceduralities of Rule 2 (a) of the Rules. This being the case, it is not very relevant whether the goods should fall under CETH 94.03 as argued by the Revenue or as CETH 8477 as claimed by the appellants. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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