TMI Blog2022 (11) TMI 1145X X X X Extracts X X X X X X X X Extracts X X X X ..... tice had been issued beyond the period of limitation on 13.07.2010. Learned counsel for the appellant/revenue has failed to point out any provision which required the respondent to intimate to the Department that he had availed the CENVAT Credit on the capital goods inputs or the input services, on which, it intended to take credit. It is not a case where the respondent had not maintained the records correctly or had filed incorrect returns. Respondent/assessee was required to disclose only those facts to the appellant/revenue as required under law. Hence, the Adjudicating Authority rightly came to the conclusion that the Show Cause Notice dated 13.07.2010 was barred by limitation. As per Rule 6(4) of the Cenvat Credit Rules, 2004, a manufacturer, who manufactures exempted goods, cannot take the benefit of CENVAT Credit . However, so far as the respondent/assessee is concerned, admittedly, it has not indulged in any manufacturing process - Since in the present case, the capital goods in question had never been used for any manufacturing activity, the learned Tribunal rightly held that the respondent/ assessee was entitled to avail CENVAT Credit on the goods in question. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... early divisible between Fixed Wet lease Charges in respect of lease of fixed assets and Variable Wet Lease Charges towards operating and maintenance of factory and as such part of the lease pertaining to the leasing of manufacturing facility falls under the category of Renting of Immovable Property service? 3. Learned counsel for the appellant/revenue has submitted that the respondent/assessee at the time of receipt of capital goods as well as at the time of their installation in the factory, had informed its intention to use them in the manufacture of exempted goods. The fact that the assessee had at a later stage filed a fresh declaration on 29.06.2007, i.e. after a period of about more than ten months to intimate that benefit of Notification No.49-50/2003-CE, would be availed by M/s Hindustan Lever Limited, Baddi, would not make it eligible to avail the CENVAT Credit involved in the said capital goods. At the time of receipt of capital goods, the assessee never intended to use the cenvatable capital goods for installation/erection of plant and machinery which would be used for providing taxable services. 4. Learned counsel for the appellant/revenue has placed relianc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p a composite mill for spinning, weaving and processing meaning thereby for manufacture of excisable goods which are chargeable to duty. We observe that the Respondents therein kept the option of availing the Modvat credit on capital goods in abeyance for about a year, till implementation of the third phase, namely, the fabric processing. The assessee submitted the required declaration under Rule 57T of the Central Excise Rules with the clear intention that it shall be availing the credit on implementation of the third phase as the final product of third phase was dutiable. In view of this, the Respondents are not entitled to Modvat credit. Accordingly, we set aside the impugned Order and allow the Appeal filed by the Revenue. 5. Learned counsel for the appellant/revenue has submitted that the appeal filed by the respondent/assessee in the said case was dismissed by the Hon ble Apex Court. Learned counsel has further submitted that the Commissioner Central Excise and Services Tax (hereinafter referred to as the Adjudicating Authority in short), has erred in holding that the Show Cause Notice dated 13.07.2010, issued for recovery of wrongly taken CENVAT Credit , was not w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal is against the view taken by it in CCE, Indore v. Surya Roshni Ltd.-2003 (155) E.L.T.481 (T) which was upheld by the Supreme Court [(2003 (158) E.L.T.A273 (S.C.)]. As per the said judgment, on capital goods which are exclusively used in manufacture of exempted goods, credit was not available. Subsequent withdrawal of exemption could not validate the credit wrongly taken. 5. We are unable to accept the submission. Present is not a case of subsequent withdrawal of exemption as in the case of Surya Roshni Notification dated 9-7-2004 is prior to the period of January, 2005 to March, 2005. The Tribunal has held that goods were not used in manufacture of exempted goods. The finding is as under:- I have carefully considered the submission from both sides and perused the records. Capital goods, in question, had been received during January, 2005 to March, 2005 and at that time the goods manufactured by using those capital goods-cotton yarn had been cleared by availing full duty exemption under notification No.30/2004-C.E. However, from June, 2005 onward, the appellants started available benefit of notification No.29/04-C.E. in respect of their clearance for export where th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovable ( Assets ) therein together with all the workers and employees hire/employed by the Lessor for running, operating and maintaining the Manufacturing Undertaking as is more particularly detailed in Schedule 2. Hereto, so as to enable HLL to manufacture the Products on its own account, using its own raw materials, Processing Chemicals and packaging materials at the Manufacturing Undertaking. Further HLL will provide the fuel like Pet Coke furnace oil, HSD, Power etc. for the Unit operation. 9. The respondent/assessee started paying service tax under the category of Business Auxiliary Service and availed CENVAT Credit on capital goods installed in its factory premises and certain other raw material used for erection of plant and machinery. 10. The case of the appellant/revenue is that since the respondent-assessee had initially filed a declaration to avail benefit of Notification dated 10.06.2003, then it was not entitled to avail CENVAT Credit on the goods in question. 11. Show Cause Notice dated 13.07.2010 was issued to the respondent/assessee, alleging that it had wrongly availed CENVAT Credit during the years 2006-2007, 2007- 2008 2008-2009, amounting to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin the period of limitation and it was observed by the Adjudicating Authority that the credit of Rs.12,56,125/- had been wrongly taken. So far as this finding of the Adjudicating Authority is concerned, the same was not contested by the respondent/assessee in appeal as it had already deposited the said amount, but had only sought waiver of penalty imposed against it by the Adjudicating Authority. 16. Admittedly, in the present case, the respondent/ assessee had not undertaken any manufacturing activity. Before the respondent/assessee could indulge in any manufacturing activity, it had entered into a Wet Lease Agreement with Hindustan Liver Limited and the respondent/ assessee thereafter started paying service tax in view of the services provided by it to its lessee. 17. The appellant/revenue based reliance on the decision in the case of Surya Roshni Limited s case (supra) to substantiate its argument that respondent/assessee was not entitled to avail CENVAT Credit . However, in the case of Surya Roshni Limited s case supra, the capital goods were being used in the manufacture of final products, on which, no excise duty was payable. The credit was availed as and when capi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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