2009 (9) TMI 851

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.... appeal is entitlement to the appellants for capital goods credit of Rs. 35,87,881/- taken on equipment for co-generation plant received during 10/2000 to 12/2002. The sugar mill had become functional on 21-1-04. The original authority demanded Rs. 35,87,881/- under Rule 57U of Central Excise Rules (CER)/ Rule 12 of Cenvat Credit Rules, 2002 (CCR) read with Section 11A of the Central Excise Act, 1944 (Act) as credit irregularly availed along with applicable interest and imposed penalty on SSAPL under Rule 57U of CER read with Section 11AC of the Act. Vide the impugned order, the Commissioner (Appeals) affirmed the above order. Facts of the case are that SSAPL had procured capital goods for setting up co-generation plant in the factory premi....

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....i) Ispat Metallics Ltd. v. Commissioner of Central Excise, Raigad - 2005 (191) E.L.T. 1107 (Tri.-Mumbai). Revenue defends the impugned order and relies on decisions of the tribunal in Spenta International Ltd. - 2007 (216) E.L.T. 133 (Tri.-LB) and I.G. Petrochemicals Ltd. - 2007 (209) E.L.T. 298 in support. 3.1 We find that in the Ispat Metallics Ltd. case (supra) the Tribunal discussed the definition of capital goods in CCR and held that credit was admissible in respect of powerhouse equipment used in the production of non-excisable electricity as long as the capital goods were used in the factory of the final product manufacturer. The potential (future) use by the manufacturer (in dutiable final products) would also entitle a manufa....

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....ade their intention clear that they would be using the said capital goods in the manufacture of excisable final products once the factory starts working to its full capacity." Further, the facts are also different in the case of Bhaskar Industries Ltd. inasmuch as in the said matter the Respondents "had a project to set up a composite mill for spinning, weaving and processing" meaning thereby for manufacture of excisable goods which are chargeable to duty. We observe that the Respondents therein "kept the option of availing the Modvat credit on capital goods in abeyance for about a year, till implementation of the third phase, namely, the fabric processing. The assessee submitted the required declaration under Rule 57T of the Central Excise....