TaxTMI 
TaxTMI 
2014 (10) TMI 807
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....s notice that the machinery, in question, in respect of Cenvat credit as mentioned above had been taken, was being used exclusively in the manufacture of fruit pulp based soft drink named MAAZA, which is fully exempt from duty and on this basis it appeared that in terms of Rule 6 (4) of Cenvat Credit Rules, 2004, the appellant would not be eligible for capital goods Cenvat credit in respect of this machinery. Inquiry was made with Shri K.K. Chandrakar, General Manager of the appellant company, who in his statement dated 05/01/06 stated that they are having 5 plants out of which 3 plants produced only dutiable goods, one plant can manufacture only exempted goods and the remaining one plant, in which the machinery, in question, has been installed, can produce only exempted goods and the remaining one plant can produce both dutiable as well as exempted goods. He also stated that in respect of the plant which can produced dutiable as well as exempted goods, they have taken capital goods Cenvat credit, though this plant is being used only for manufacture of fruit pulp based soft drink - MAAZA, a fully exempted final product. He stated that they have not availed Cenvat credit in respect ....
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....g at various sites across the world. Accordingly Hon'ble High Court observed that what the manufacturers of the machinery have certified is that the machinery, in question, is designed to handle carborated/aerated soft drink by software changes and minor adjustment and the certificate never said that the objective can be achieved only after modification and, as such, the certificate did not use the word 'modification' which has crept in the order of the Tribunal. Hon'ble High Court also observed that the appellant have now filed a certificate dated 25/09/09 of the manufacturers of the machinery which indicates that no modification in the machinery can be done in India since it has been manufactured at Germany and had been imported into India. Accordingly, Hon'ble High Court directed the Tribunal to decide the matter afresh keeping in view the above observations and also taking into account the certificate dated 25/09/09 produced by the appellant before Hon'ble High Court. 1.3 Accordingly, the matter was heard afresh. 2. Heard both the sides. 3. Shri A.P. Mathur and Shri Jitendra Bharti, Advocates, the learned Counsels for the appellant, pleaded that the machinery, in question, i....
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....icable to the facts of this case, as in that case, M/s Surya Roshni Ltd. had not filed any declaration by which it could be gathered that at the time of receipt of the machinery, they had intention to use the same for manufacture of dutiable goods also, whereas in the case of the appellant, there is a declaration from the very beginning that they would be manufacturing dutiable goods (aerated waters) also and that in view of the above submissions, the impugned order is not correct. 4. Shri Amresh Jain, the learned DR, defended the impugned order by reiterating the findings of the Commissioner in it and emphasized that the machinery, in question, is meant for manufacture of fruit pulp based soft drinks (MAAZA), that it cannot be used for manufacture of aerated waters without major modification, that in any case, since at the time of receipt of the capital goods during April 2004 to August 2005 period and till September 2006, the same were being used exclusively for manufacture of MAAZA which is fully exempted goods, in view of judgment of the Tribunal in the case of CCE, Indore vs. Surya Roshni Ltd. (supra), they would not be eligible for Cenvat credit, as the eligibility for Cenva....
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....d as from the very beginning, the appellants intention was to use the capital goods, in question, for manufacture of both, dutiable as well as exempted final product and that notwithstanding the fact that till September 2006, the machinery was used only for manufacture of fruit pulp based soft drinks (exempted final product), since they started using the machinery since October 2006 for manufacture of aerated waters (dutiable final product), they would be eligible for Cenvat credit. According to the appellant, the judgment of the Tribunal in the case of CCE, Indore vs. Surya Roshni Ltd. (supra) is not applicable to this case, as in this case, from the very beginning their intention was to use the machinery for manufacture of dutiable as well as exempted final product and that for this purpose, it is not necessary both dutiable and exempted final products have to be manufactured simultaneously. 7. In terms of the provisions of sub-Rule (4) of Rule 6 of the Cenvat Credit Rules, 2004 Cenvat credit shall not be admissible on capital goods which are used exclusively in the manufacture of exempted goods or in providing exempted services, other than the final products which are exempt f....
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....t cannot be denied. When at the time of receipt of capital goods, capable of use in manufacture of dutiable as well as exempted final products, there is evidence to show that the manufacturer had intention to use them for manufacture of dutiable as well as exempted final product, the eligibility of the capital goods for Cenvat credit cannot depend upon the order in which the same are used - whether first for the manufacture of exempted final products or for the manufacture of dutiable final product. We are supported in this view by the judgment of Hon'ble Gujarat High Court in case of CCE, Vadodara II vs. Gujarat Prepack reported in 2009 (234) E.L.T. 409 (Guj.), wherein the Hon'ble High Court has held that when the capital goods installed in the year 2000 were used for manufacture of exempted goods on trial basis and subsequently were used for manufacture of dutiable goods when regular production was started, the Cenvat credit in respect of capital goods cannot be denied and the Tribunal's judgment in case of M/s Surya Roshni Ltd. (supra) would not be applicable. 8. In the present case the capital goods had been received during period from September 2004 to August 2005 when the Ce....