TaxTMI 
TaxTMI 
2009 (2) TMI 186
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....er Sub-Heading 87039090 and 87089900 of CETA, 1985. During CERA audit, it was observed that the respondents had availed capital goods credit of Rs. 40,82,645/- representing 50% of the duty paid on the capital goods acquired during the year 2002-03. The balance 50% was availed by them in the subsequent year i.e. in the month of April, 2003, even though the capital goods though in their possession but were not put to use. As such, it was alleged that they had not fulfilled the condition of provisions of Rule 4(2) of Cenvat Credit Rules, 2002. It was further observed that the said capital goods were put to use on various months of the year 2003-04 and the respondents had not acquired any new capital goods during the year 2003-04. 3.2 Show C....
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....t in the month of April, 2003 in respect of the capital goods acquired during the 2002-03, which though, in their possession, were not put to use for production. 5. The extract of the Rule 4(2)(b) of Cenvat Credit Rules, 2002 is as below: "The balance of Cenvat Credit may be taken in any financial year subsequent to the financial year in which the capital goods other than components, spares and accessories, refractories and refractory materials and goods falling under Heading no. 68.02 and Sub-Heading No. 6802.10 of the First Schedule to the Tariff Act are in the possession and use of the manufacturer of the final products in such subsequent years". From the above underlined words viz, possession and use of the manufacturer, the in....
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....7. The CBEC Circular No. B-4/7/2000-TRU, dated 3-4-2000 at para-8, when it lays down that installation is not a pre-requisite for taking capital goods credit, is actually speaking in respect of the first 50% Cenvat Credit, which can be availed on receipt of the capital goods, without waiting for its installation. (In respect of the balance 50% CENVAT credit, the Circular says that the same can be taken in a financial year subsequent to 2000-2001). Hence the observation of the Commissioner (Appeals) that the CBEC Circular No. B-4/7/2000-TRU dated 3-4-2000 also explicitly lays down that installation is not a pre-requisite for taking capital goods credit, is not correct. 8. Tribunal's decision in Ballarpur Industries case reported in 200....
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....ourt Judgment in the case of UOI v. West Coast Paper Mills Ltd. reported in 2004 (164) E.L.T. 375 (S.C.). Notwithstanding this, the Tribunal significantly in Ispat Industries case (supra) has observed that the worst allegation against the appellant could be prematurely taking the credit thus entitling the Revenue to the interest on the same for use of the credit during in between period. I find that this is precisely what has been done by the Revenue in the case before me. 10. Also in the CESTAT's judgment in the case of M/s. Parasrampuria Synthetics reported in 2004 (170) E.L.T. 327 (Tri.-Del), which squarely covers the present case, it has been held that 50% of the balance credit cannot be allowed without installation/use of the goods ....