Tribunal Grants CENVAT Credit: Capital Goods Eligible Once Used in Factory

The Tribunal allowed the appeal filed by the appellant, setting aside the Commissioner's order. It held that capital goods, once put to use in the factory and cleared from there, were eligible for the balance 50% of CENVAT credit in the same financial year. The Tribunal considered relevant legal provisions and previous judgments, ultimately granting consequential relief to the appellant.

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Issues:
- Irregular availing of CENVAT Credit on moulds
- Interpretation of Rule 4 (2) (a) of CENVAT Credit Rules, 2002/2004
- Applicability of judgments in similar cases

Analysis:
1. The case involves an appeal against an Order-in-Original passed by the Commissioner of Central Excise, Bolpur, regarding the irregular availing of CENVAT Credit on moulds by the appellant. The appellant availed 50% of the eligible credit on moulds upon receipt, used them in their factory, and then cleared them to other units in the same financial year after availing the balance 50% credit. The Revenue contended that once the moulds were put to use and cleared from the factory, they could not be considered "as such" under Rule 4 (2) (a) of CENVAT Credit Rules, 2002/2004.

2. The appellant argued that the clearance of moulds from the factory after use should still be considered "as such," citing a judgment by the Larger Bench of the Tribunal in a similar case. The Revenue reiterated the findings of the Commissioner, upholding the denial of the balance 50% CENVAT Credit in the same financial year. The Tribunal examined the facts and relevant legal provisions, including the interpretation of the term "as such" under Rule 4 (2) (a) of CENVAT Credit Rules, 2002/2004.

3. The Tribunal referred to previous judgments by the Larger Bench and High Courts in similar cases, including the Modernova Plastyles Pvt. Ltd. case and the Commr. of Central Excise, Hyderabad-III Vs. Navodhaya Plastic Industries Ltd. case. It also considered the judgment of the Madras High Court in the case of CCE, Salem Vs. Rogini Mills Ltd. for determining the quantum of depreciation post the November 2007 amendment to the Rule. The Tribunal found that the appellant had reversed the entire amount of CENVAT credit before removing the capital goods in the same financial year, making them eligible for the balance 50% credit upon clearance from the factory.

4. Ultimately, the Tribunal concluded that the capital goods, once put to use in the factory and cleared from there, were eligible for the balance 50% of CENVAT credit in the same financial year. As a result, the Tribunal set aside the order of the Commissioner and allowed the appeal filed by the appellant, granting consequential relief as per law.

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