2010 (1) TMI 1048

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....s according to the provisions of Cenvat Credit Rules, 2004. During the period from January, 2005 to March, 2005, certain capital goods were received in the appellant's factory in respect of which Cenvat credit amounting to Rs. 75,798/- was availed. Subsequently, the Department issued a show cause notice dated 2-2-2006 seeking recovery of Cenvat credit along with interest and also proposing imposition of penalty on the ground that the appellants were not eligible for capital goods Cenvat credit as during that period, the capital goods had been used exclusively for manufacture of exempted finished products. Show cause notice was adjudicated by the Asstt. Commissioner vide Order-in-Original dated 28-11-2006 by which Cenvat credit demand of Rs.....

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..... 795/28/2004-CX., dated 28-7-2004 it is permissible for a manufacturer to avail benefit under both the exemption notifications i.e. 29/04-C.E. prescribing optional rate of duty at 4% on cotton yarn and No. 30/04-C.E. prescribing full duty exemption; that the Commissioner (Appeals) has denied the Cenvat credit following the Tribunal's judgment in the case of CCE, Indore v. Surya Roshni Ltd. reported in 2003 (155) E.L.T. 481 (Tribunal), wherein it was held that the eligibility for capital goods Cenvat credit is to be determined on the basis, as to whether at the time when goods are received by the manufacturers, the finished product, in the manufacture of which capital goods are to be used was dutiable or not; that if at the time of receipt ....

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....ull duty exemption under Notification No. 30/04-C.E. and, therefore, in terms of Tribunal's judgment in the case of Surya Roshni, capital goods Cenvat credit has been rightly denied; that the Tribunal's judgment in the case of Surya Roshni (supra) has been affirmed by the Apex Court by dismissing Civil Appeal No. 8512/03 filed by M/s. Surya Roshni Ltd; that there is no dispute about the fact that during January, 2005 to March, 2005 period when the capital goods had been received the same were being used exclusively for manufacture of exempted finished product and, therefore, the Commissioner (Appeals) has rightly upheld the Order-in-Original passed by the Asstt. Commissioner. 4. I have carefully considered the submissions from both sides....