Tribunal denies Cenvat credit without possession or use of capital goods. Rule 4(2)(b) applies.

The Tribunal upheld the Order-in-Appeal, ruling that the appellant was not entitled to the remaining 50% Cenvat credit on capital goods as the moulds were not in possession or use during the subsequent financial year. Rule 4(2)(b) of the Cenvat Credit Rules, 2002 mandates that the balance credit can only be availed when the capital goods are in possession and use. Despite arguments citing a Board Circular and tribunal judgments, the appellant's failure to demonstrate possession and use led to the dismissal of the appeal, affirming the demand for credit, penalty, and interest imposed by the Revenue.

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Issues:
- Availment of Cenvat credit on capital goods
- Interpretation of Rule 4(2)(b) of Cenvat Credit Rules, 2002

Analysis:
1. The appeal challenged an Order-in-Appeal that upheld an order-in-original regarding the appellant's availing of 50% Cenvat credit on C.I. Moulds. The appellant took the remaining 50% credit in a subsequent financial year, but the moulds became defective and were cleared as waste. The Revenue contended that as per Rule 4(2)(b) of Cenvat Credit Rules, 2002, the balance of credit can only be taken when the capital goods remain in possession and use. A show cause notice led to a demand for credit amounting to Rs. 1,57,008/-, a penalty of Rs. 20,000/-, and interest under relevant rules.

2. Despite the absence of the appellant during the hearing, the matter was considered for disposal on merit.

3. The Revenue reiterated that the appellant was not entitled to the balance 50% credit as the moulds were not in possession or use, citing a Board Circular and previous tribunal judgments. The appellant's lack of possession and use of the moulds rendered them ineligible for the remaining credit.

4. The Tribunal, after reviewing the submissions and records, concluded that the appellant had availed 50% credit initially but was not entitled to the remaining 50% credit as the moulds were not in possession or use during the subsequent financial year. Rule 4(2)(b) stipulates that the balance credit can only be taken if the capital goods are in possession and use, which was not the case here. Citing previous judgments and the Board's clarification, the Tribunal upheld the impugned order, dismissing the appellant's appeal.

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