TaxTMI 
TaxTMI 
2010 (3) TMI 391
X X X X Extracts X X X X
X X X X Extracts X X X X
....y had started manufacture of herbal cosmetics from 1-8-04 but since their clearances during 2004-05 were below to rupees one crore, they did not obtain registration; that they took Central Excise Registration on 30-6-05 as soon as their clearances crossed Rupees one crore and that they intend to avail Cenvat credit of duty on capital goods purchased during July'03 - June'04 period. The Appellant took capital goods Cenvat credit of Rs. 1,77,116/- on 30-8-05 (equivalent to 50% of the total duty on the capital goods) and took balance 50% credit of Rs. 1,77,116/- on 30-10-05. A show cause notice dt. 21-8-06 was issued to the Appellant for recovery of the Cenvat credit of Rs. 3,54,232/- alongwith interest and also imposition of penalty on them u....
X X X X Extracts X X X X
X X X X Extracts X X X X
....th Shukla, Advocate, the learned Counsel for the Appellant, pleaded that since the capital goods had been received during July'03 - June'04 period i.e. during 2003-2004 and 2004-2005 period and capital goods Cenvat credit in respect of these capital goods was available in terms of CCR, 2002, the capital goods Cenvat credit earned by the Appellant in terms of the provisions of CCR, 2002 was available to the Appellant on 30-6-05 in terms of the transitional provisions of Rule 11(1) of CCR, 2004, that availability of capital goods Cenvat credit has nothing to do with Central excise registration; that during the period when the capital goods were received, the Appellant being manufacturer of excisable goods, were eligible for capital goods Cenv....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... with reference to the dutiability of the final product on the date of receipt of capital goods, and since during the period when the capital goods had been received, the finished products manufactured by the Appellant were fully exempt from duty, they are not eligible for capital goods Cenvat credit. 3. I have carefully considered the submissions from both the sides and perused the records. The capital goods, in this case, had been received during July'03 - June'04 period and were installed during Dec'03 - Aug'04 period. The production of excisable goods started from 1-8-04. Since the Appellant were availing SSI exemption under Notification No. 8/03-C.E. and during 2004-2005, the value of their clearances was within the full exemption l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of Rule 3(1) of CCR, 2002, a manufacturer or producer of final product was eligible for Cenvat credit of the specified duties paid on inputs or capital goods received in the factory on or after 1-3-02 for use in or in relation to manufacture of final products. The term "final product" is defined in Rule 2(e) of CCR, 2002 as excisable goods manufactured or produced from inputs, except matches. Since there is no dispute that the goods manufactured by the Appellant are excisable goods, they have to be treated as "manufacture of final products". Since there is no dispute that the capital goods received were meant for use in or in relation to manufacture of final products, and since the duty whose Cenvat credit is sought to be taken is one of th....