2007 (6) TMI 91

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....005 dated 26-12-2005. 2. Heard both sides and perused the records. 3. The issue involved in this case is regarding availment of Modvat credit of 50% of the amount of duty paid on capital goods, which was taken by the respondent in 2003-2004. It is the allegation of the revenue that the appellants had not installed machinery, still they have availed the credit. The undisputed fact is that the....

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....e machinery was not installed when the balance credit was raised on 1-4- 2003, it is inadmissible. It is concluded that since the machinery was not Installed it was not in use by the appellant. I find that the fact is that the machinery was in possession of the appellant. It is to be seen what does "in use" means. The department has taken a very narrow view inasmuch as they it has construed "in....

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....ion during the relevant period it was in use, and so credit cannot be denied. In this connection I rely on the case law of M/s. Mukund Ltd. v. CCE, Mumbai - 2003 (165) E.L.T. 103 (T-Mum) wherein it is held that 50% capital goods credit if not taken in the year the said capital good are received - such credit is "earned" and 50% could be taken in the same financial year and other 50% could be taken....