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TMI Blog2024 (12) TMI 791X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the same as input instead of 50% of the credit, being maximum permissible availment for capital goods in a year, that had resulted in confirmation of duty demand of Rs.68,26,125/- under Rule, 14 of the CENVAT Credit Rules, 2004 read with Section 11A(10) of the Central Excise Act, 1944 alongwith interest and 50% penalty on the confirmation amount for the period from April, 2011 to March, 2014 is assailed in this appeal by the Assessee-Appellant. 2. Appellant is a manufacturer of excisable goods namely flexible packing material of plastic, printed/unprinted flexible PE film, label, aluminium foils, roto cylinders etc. It has been availing CENVAT Credit on the inputs capital goods and on input services. Audit conducted on the records of A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set on the issue including the one reported in 2013 (294) ELT 303 (Tri.-Ahmd.) in the case of Sanghi Industries Ltd. Vs. Commissioner of Central Excise, Rajkot apart from the fact that whole exercise was Revenue neutral, for which the order passed by the Principal Commissioner is liable to be set aside. His further submission is that closing balance of CENVAT Credit in all 36 months period were much beyond the disputed amount except for the months of May and June 2011, for which no interest was payable but Appellant had promptly paid interest on the value of credit availed to buy peace for it but that was not considered favourably by the Commissioner while passing the order. 4. Per contra, learned Authorised Representative Mr. Vinod S. Che ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cate that a manufacturer or provider of output service shall not take CENVAT Credit after six months of the date of issue of invoice or duty paying documents and this proviso being inserted w.e.f. 01.09.2014, that makes sub-Rule 2(a) Otios, issue of showcause- cum-demand notice on 23.09.2014 would not be sustainable in law and facts, since other 50% of the credit can't be taken after expiry of six months. Therefore, if it can be presumed that such taken is supposed to be considered 'taken and utilised' and Appellant had enough credit in its CENVAT Credit Account in all 36 disputed months barring two, for which it can't be said that it had availed (utilised) the other 50% of the credit at any relevant point of time. 6. Be that as it may wha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cylinders are nothing but capital goods." (Underlined to emphasise) From the above observation it is crystal clear that though cylinder was accepted as capital goods, it was considered as part of the printing machine and therefore, taking of full CENVAT Credit at 100% by the Appellant can't be considered as irregular, apart from the fact that such credit was never ever utilised by the Appellant to its fullest extent and proportionate interest was also paid for the expressly debarred period. Hence the order. THE ORDER 8. The appeal is allowed and the order passed by the Commissioner of Central Excise, Mumbai-III vide Order-in-Original No. 11/COMMR/M-III/KCG/2015-16 dated 22.05.2015 is hereby set aside with consequential relief, if any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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