2011 (3) TMI 732

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....msp;The assessee - M/s. Rajashri Packagers Limited are engaged in the manufacture of refined vegetable oil and vanaspati by processing crude oil which are exempted from payment of excise duty. In the course of manufacture of vanaspati by-products emerge at different stages. These by-products are cleared on payment of duty. Certain capital goods were received which is utilised in the manufacture of these exempted goods and accordingly Cenvat Credit was taken. The revenue proceeded against the assessee on the ground that these capital machineries were used in the plant which produces vanaspati, which is totally exempted. When the capital goods are used exclusively for manufacture of exempted goods, no credit would be available in terms of Rul....

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....f the original authority who visited the factory, saw with his eyes the manufacturing process and who has recorded a categorical finding that the exempted goods emerge by the exclusive use of the capital goods, the Appellate Authority and the Tribunal could not have ignored the said finding of fact and held that the assessee was entitled to the Cenvat Credit. Therefore, he submits the impugned order requires to be set aside. 6. Per contra, the learned counsel for the assessee supported the impugned order. 7. This appeal was admitted on 24-6-2010 to consider the following substantial questions of law :- (i)      Whether under the facts and circumstances of the case the Tribunal is right in holding ....

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....he new machinery, the final product vanaspati emerges at the end. The assessing authority who visited the spot has not stated that the entire processing is done in the new machinery. From his own report it is clear a portion of the process takes place in the old machinery and the remaining portion takes place in the new machinery. In other words, from the stage of raw material being inducted into the machinery till the final product emerges, both the machineries are used. Without old machinery, by operating the new machinery alone this exempted goods of vanaspati cannot be manufactured. Similarly, by using the old machinery alone, without the aid and assistance of the new machinery, vanaspati cannot be manufactured. As rightly pointed out b....