2006 (1) TMI 411

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.... of the Cenvat credit on the moulds and dies was taken on 1-4-2001, in the financial year 2001-2002, during which period the moulds and dies were no longer in existence, the same having been destroyed in the course of use thereof for the manufacture of final product in the previous financial year. The lower authorities disallowed this balance credit to the assessee on the ground that the capital goods (moulds and dies) were not in their possession and use during the period of dispute (2001-2002). In other words, the assessee was found not to have fulfilled the condition of "possession and use" laid down in Rule 57AC(2)(b). Hence this appeal. 2. Learned Counsel submits that the amendments brought to the relevant rule, by Notification 70/0....

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....esentations were considered and sub-rule (2)(b) of Rule 4 of Cenvat Credit Rules, 2002 has been amended to allow credit in respect of the balance 50% of the duty on Moulds and Dies in a subsequent financial year even if the conditions of these goods being in the possession and use of the manufacturer of financial products in such subsequent year is not fulfilled. In other words, the balance 50% credit may be taken by the manufacturer of final products for Moulds and Dies in a subsequent financial year when these goods have been used for the manufacturer of final products but no longer available in such subsequent financial year". It appears from the above clarification that what was contemplated by the Board was that, prior to the amendm....

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....pute regarding the status of moulds and dies, which are admittedly capital goods. Clause (b) of sub-rule (2) of Rule 57AC clearly covers the subject matter of this appeal. Admittedly, the capital goods as such were not in the possession and use of the manufacturer in 2001-2002 when the 50% balance credit in question was taken. Hence as rightly held by the lower authorities, the assessee was not entitled to take balance 50% of Cenvat credit on the moulds and dies in question. 3. Perhaps, an analogy could be drawn between the facts of this case and the factual situation contemplated in the proviso to sub-rule 2(a) of Rule 4 of the Cenvat credit rules. Rule 4(2)(a) lays down that up to 50% of Cenvat credit on capital goods received in the f....