TaxTMI 
TaxTMI 
2006 (1) TMI 489
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....eceived 'aluminium matrices' (capital goods) from the Kuruchi unit and took Cenvat credit of 50% (Rs. 27,224/-) of the duty paid thereon in terms of Rule 57AC(2)(a) of the Central Excise Rules, 1944. Subsequently, they removed the capital goods on payment of full duty (Rs. 54,448/-) to another unit. Most of these removals were made in the same financial year (2000-2001), there being one removal in April 2001. The appellant-unit took the balance 50% credit (Rs. 27,224/-) in 2001-02 in terms of Rule 57AC(2)(b). The lower authorities disallowed this credit of Rs. 27,224/- to the assessee on the ground that the capital goods were not in the possession and use of the manufacturer in the Pondicherry unit when the credit in question was taken. Hen....
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....ned order and by submitting that ''possession and use" of capital goods as contemplated under Rule 57AC(2)(b)/Rule 4(2)(b) must necessarily be in the same factory in which the capital goods were received in terms of Rule 57AC(2)(a)/Rule 4(2)(a). 4. After examining the relevant rules and considering the rival arguments, I am unable to accept the point made by ld. counsel regarding "possession and use". Clause (a) & (b) of sub-rule (2) of Rule 57AC read as under :- "RULE 57AC. Conditions for allowing Cenvat credit - ............... (2) (a) The Cenvat credit in respect of capital goods received in a factory at any point of time in a given financial year shall be taken only for an amount not exceeding fifty per cent of the duty....
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....h clause (b) of Rule 57AC(2). The only difference between these provisions is that the word "still" is absent in clause (b) of Rule 4(2). This, however, is inconsequential inasmuch as even otherwise, the condition stipulated in either of the provisions for availment of balance credit in a subsequent financial year can only be understood as 'possession and use' of the capital goods in the same factory of the manufacturer in the financial year in which such balance credit is taken. If it be construed otherwise, one unit of a manufacturer can take 50% Cenvat credit on a capital goods and another unit can avail the balance 50% on the same goods through a mechanism of inter-unit transfer of capital goods. This kind of situation is not contemplat....
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....r :- "RULE 4. Conditions for allowing Cenvat credit - ............... (2)(a) The Cenvat credit in respect of capital goods received in a factory at any point of time in a given financial year shall be taken only for an amount not exceeding fifty per cent of the duty paid on such capital goods in the same financial year : Provided that the Cenvat credit in respect of capital goods shall be allowed for the whole amount of the duty paid on such capital goods in the same financial year if the said capital goods are cleared as such in the same financial year." The above proviso came into force on 1-3-2002 and it became lawful for the appellant to avail 100% Cenvat credit on capital goods in a given financial year, if the goods are....