TaxTMI 
TaxTMI 
2015 (4) TMI 240
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....e relevant facts of the case, in brief, are that the assessee is engaged in the manufacture of Polycarbonate Bottles, Plants & Machineries etc. They received the imported capital goods mainly Insert, Lip, Cavities, Injection Core in the month of May 1997 and May 1998 and used in the manufacture of finished product Polycarbonate, which was exempted from duty by Notification No.4/1997-CE, dt.10.03.1997. The said notification was rescinded and replaced by Notification No.5/1998-CE, dt.02.06.1998. The assessee discontinued the benefit of exemption notification and started paying duty. The assessee availed the CENVAT Credit on the capital goods, which were received and utilized during the month of May 1997 and May 1998. The credit was taken on 1....
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....ee availed the conditional benefit of exemption Notification No.4/1997-CE. The said notification provides the condition that the exemption will be eligible if no CENVAT Credit has been availed by the manufacturer. It is submitted that the after the Larger Bench decision, Hon ble High Court and the Tribunal held that the said decision would not be applicable in the case of availment of CENVAT Credit on the basis of conditional notification. He relied upon the following decisions:- a) CCE Chandigarh Vs S.T. Cottex Exports Pvt.Ltd. 2011 (268) ELT 318 (P&H) b) Oswal Woolen Mills Ltd Vs CCE Ludhiana 2012 (284) ELT 240 (Tri-Del) c) CCE Madurai Vs Eastman Spinning Mills Pvt.Ltd. 2011 (271) ELT 256 (Tri-Che.) d) CCE Bangalore Vs Kailash....
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....ries Vs CCE (Appeals) Guntur 2014-TIOL-594-CESTAT-Bang, upheld the demand of reversal of CENVAT Credit, while the penalty was set aside. He further submits that the case laws relied upon by the learned Advocate would not be applicable in the present case. It is submitted that the case of S.T. Cottex Exports Pvt.Ltd (supra), Oswal Woolen Mills Ltd (supra), Eastman Spinning Mills Pvt.Ltd (supra) are related to Notification No.29/2004 in respect of eligibility concessional rate of duty. The decision of Hon ble Karnataka High Court in the case of CCE Vs Kailash Auto Builders Ltd 2012 (280) ELT 49 (Kar.) credit of capital goods was availed for both exempted and dutiable goods. 8. Regarding the demand being barred by limitation, the learned Au....
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....r the date of utilization of eligibility 50% credit. The Larger Bench answered the reference by holding that the CENVAT Credit eligibility is to be determined with reference to the dutiability of the final product on the date of receipt of the capital goods. The relevant portion of the decision of Larger Bench in the case of Spenta International Ltd (supra) is reproduced below:- "8. The recent decision of the Tribunal? in CCE v. Precot Mills Ltd., 2007 (212) E.L.T. 483 follows the Surya Roshni decision and the Grasim Industries decision as well as the Sengunthar decision, to hold that the relevant date for determination of availability of Modvat credit is the date of receipt of capital goods in the factory and if on that date no credit w....
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....e High Court in the case of S.T. Cottex Exports Pvt.Ltd (supra). In that case, by virtue of Notification No.29/2004-CE, optional 4% duty was payable on the manufactured goods and it cannot be said that the assessee used the capital goods in the manufacture of exempted goods, in such case, the assessee could not claim the benefit of CENVAT Credit under Rule 6(4) of the CENVAT Credit Rules, 2004. The facts in the case of Oswal Woolen Mills Ltd (supra) and Eastman Spinning Mills Ltd (supra) are similar to the decision of S.T. Cottex Exports Pvt.Ltd. In the case of Kailash Auto Builders Ltd (supra), the assessee used the capital goods in the manufacture of both the exempted and dutiable finished goods. So, none of the case laws is supporting th....