2011 (10) TMI 303

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....invoice dated 5.12.05 and the said capital goods were received in the factory on 22.12.05 whereas they had taken the credit of duty paid on capital goods in November, 2005 itself. The Revenue's case is that in terms of the provisions of Cenvat Credit Rules, an assessee is entitled to take credit only after the receipt of capital goods. Inasmuch as the appellants availed cenvat credit before the receipt of the capital goods, the said credit is not admissible to them. Accordingly, the proceedings were initiated against them by way of issuance of show cause notice resulting in confirmation of demand of duty by denying cenvat credit and imposition of penalty under Rule 15(1) and Rule 15(2) of Cenvat Credit Rules, 2004.  On appeal against t....

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.... the appellant are partnership firm, and as per the proviso to Rule 6 (1) of Service Tax Rules, 1994, they were liable to pay the Service Tax for the quarter in dispute by the 5th of January, 2006, therefore they have not earned any extra credit for payment of service tax. But it is also a fact that the appellant had taken the Cenvat Credit before receipt of the Capital goods. When the date of payment was 5th January, 2006, on this count, it does not make any difference that the credit was shown to have taken in the month of November or December 2005.  Credit available upto 31/12/2005, could have been utilized towards payment of Service Tax for the quarter ending on 31/12/2005 and if the credit would have been taken on or after receipt....

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....e same would have been availed for payment of duty in January, 2006. 5. I find that there is no dispute about receipt of the capital goods in the factory of appellants on 22.12.2005 and availability of credit of duty after the said date. Merely because, the appellants have made credit entry in their record in the month of November, 2005, instead of making the same in December, 2005, by itself cannot be made a ground for denial of credit on such technical ground, which is otherwise available to the appellants.  Inasmuch as the appellants were admittedly entitled to credit after 22.12.2005, I find no reason for denial of the same. 6. Further, it is not available  on record that by availing the credit in November, 2005, whether the....