2022 (6) TMI 379

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... A/51638/2020EX[DB] dated 09.12.2020 passed by CESTAT whereby the appeal filed by the Respondent- assessee was allowed and order dated 04.10.2019 passed by Commissioner (Appeals), Central Excise & Central Goods and Services Tax, Alwar was set aside. 2. The revenue has filed present appeal on the following Substantial Questions of Law which reads as under:- "(I) Whether on the facts and in the circumstances of the case, the Appellate Tribunal was correct in allowing CENVAT credit on capital good procured and installed by the assessee for the purpose of manufacture of the said goods which are exempted from payment of duty even though the purpose of installation of the capital goods and intention of the assessee is clearly manifest....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... show cause notice was dropped by the Adjudicating Authority vide Order-in-Original dated 27.07.2019, wherein it was categorically held by the Adjudicating Authority that the assessee was entitled to take CENVAT Credit on capital goods received by him during 2016-17 as the capital goods installed and used for manufacturing dutiable goods as well as exempted goods in terms of Notification dated 09.07.2004 cannot be considered as used exclusively for manufacturing exempted goods in terms of proviso to Rule 6(4) of the CENVAT Credit Rules, 2004. 5. The said Order-in-Original dated 27.07.2019 of the Adjudicating Authority was assailed by Revenue- appellant whereby the Commissioner (Appeals) vide order dated 04.10.2019 allowed the appeal on t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....vanced by the respective parties. 8. On perusal of the records and consideration of the arguments following admitted points emerge:- (i) Respondent is registered firm/company and has been filing regular returns. (ii) It was only upon audit objection that the demand was raised. (iii) The Adjudication Authority vide order dated 27.07.2018 has adjudicated the demand in favour of the respondent and dropped the show cause notice. (iv) The CESTAT by passing directions under Rule 6(4) of the CENVAT Credit Rules, 2004, has allowed the appeal of assessee on the fact that the assessee had cleared goods on payment of duty during 2017-18 as evidenced by ER-1, filed for June 2017 and they had installed the capital ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....oods." 10. On perusal of the said Rule which is absolutely clear that if capital goods are used for manufacture of dutiable goods within a period of two years from the date of commencement of commercial production or from the date of installation as per proviso, the same will be entitled for CENVAT Credit. It is relevant to consider that in light of Section 37 of the Act of 1944, the CENVAT Credit Rules, 2004, are framed with the beneficiary intention and to give exclusive effect of duty paid under the VAT regime of Taxation. The legislature in its wisdom has exclusively specified in Rule 6(4) of the CENVAT Credit Rules, 2004 that the credit upon capital goods will not only be debarred and restricted but also not allowed when the same ar....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....6) GSTL 453 (Mad.) it has been concurrently held that if the capital goods are not used exclusively for period of two years qua the exempted goods and if the capital goods are further used for manufacture of exported goods also, the CENVAT Credit on the said goods is available and is not debarred. 12. In light of series of judgments and facts referred above which the learned counsel for the revenue was not able to refute we are inclined to dismiss this appeal. 13. In the present appeal placing reliance upon the Apex Court Judgment in the case of Steel Authority of India Ltd. Vs. Designated Authority, Directorate General of Anti Dumping & Allied Duties & Ors.: (2017) 13 SCC 1, wherein the question of admission of an appeal on substanti....