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of <h1>Tribunal allows duty credit for packing machine despite exempted goods production.</h1> <h3>COMMISSIONER OF CENTRAL EXCISE, MEERUT-I Versus BACKWELL AGRO LTD.</h3> COMMISSIONER OF CENTRAL EXCISE, MEERUT-I Versus BACKWELL AGRO LTD. - 2013 (291) E.L.T. 365 (Tri. - Del.) Issues involved:Interpretation of Rule 4(2)(b) of the Cenvat Credit Rules regarding availing credit for capital goods used in manufacturing exempted goods.Detailed Analysis:1. Common Issue Involving Two Appeals:The appeals involved a common issue regarding availing credit for capital goods used in manufacturing exempted goods. The appellant, engaged in biscuit manufacturing, availed 50% duty credit on a packing machine in 2006 and the remaining 50% in 2007. The Revenue denied the latter credit, claiming the machine was used exclusively for exempted goods.2. Appellant's Argument:The appellant argued that under Rule 4 of the Cenvat Credit Rules, credit eligibility is determined based on the date of receiving capital goods, not the dutiability of the final product. They cited the case of Spenta International Ltd. v. CCE, Thane, emphasizing that credit eligibility is linked to the receipt date of capital goods.3. Revenue's Position:The Revenue contended that since the packing machine was solely used for manufacturing exempted biscuits, the appellant should not be entitled to the remaining 50% credit on duty paid for the machine.4. Tribunal's Decision:The Tribunal referred to the Spenta International Ltd. case, where credit eligibility was linked to the date of receiving capital goods, regardless of the subsequent dutiability of the final product. In the present case, since the goods manufactured were dutiable at the time of receiving the machine, the appellant was entitled to the credit. The Tribunal emphasized that Rule 4(2)(b) does not impose a condition that credit for remaining duty paid on capital goods is dependent on the dutiability of the final product.5. Conclusion:The Tribunal set aside the Revenue's denial of the remaining credit, allowing the appellant's appeal. Consequently, the Revenue's appeal for penalty enhancement was dismissed, as it lacked merit in light of the appellant's successful appeal.This detailed analysis of the judgment highlights the interpretation of Rule 4(2)(b) of the Cenvat Credit Rules and the significance of the date of receiving capital goods in determining credit eligibility, as established in relevant case law.
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