2004 (3) TMI 221

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.... Commissioner (Appeals). In the impugned order, the Commissioner rejected the appeal and upheld the order of the lower authority, who demanded Rs. 97,062/- availed as credit on the capital goods received by them and imposed a penalty of Rs. 5,000/- on the company. 2. Briefly the facts are that the appellant was availing of credit of Cenvat on capital goods under Cenvat Credit Rules, 2001/2002. ....

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....ommissioner (Appeals). Hence this appeal. 3. Heard both sides. 4. Rule 4(2)(a) & (h) of Cenvat Rules, 2001, as it existed at the relevant time, is reproduced below :- "(a) The Cenvat credit in respect of capital goods received in a factory at any point of time in a given financial year shall be taken only for a amount not exceeding fifty per cent of the duty paid on such capital goods in ....

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....has transferred the capital goods in question to another unit of his own. Thus, the provisions of the Rule, in this given situation, would have resulted in taking only 50% of credit of the duty paid on the capital goods even though duty was paid in full on the capital goods. The intention of the legislature could not have been to defeat the object of the Cenvat Rules. 6. The above Rule underwen....

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....t Rules covering the situation. It is pertinent that prior to Cenvat Rules, 2001 which came into effect from 1-7-2001. Rule 57Q(1) permitted taking of full credit (100%) of the duty paid on the capital goods if such capital goods are removed from the factory wherein they were received in the same financial year. This position would therefore add credence to the theory that what was specifically al....