Naini Papers Ltd vs Commissioner Of Central Excise

[Arising out of Order-In-Appeal No. 94-CE/MRT-II/2009 dated 30/1/2009 passed by Commissioner of Customs & Central Excise, (Appeals), Meerut II ]

For approval and signature:

Honble Mr Ashok Jindal, Member (Judicial)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

Naini Papers Ltd. Appellants

Vs.

Commissioner of Central Excise Respondent

Meerut II

Appearance:

Shri K Kant, AR for the Appellants

Shri R K Mishra, Advocate for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 10.6.2015

FINAL ORDER NO. A/ 51873 /2015-Ex(SM)

Per Ashok Jindal :

The appellant is in appeal against the impugned order denying cenvat credit on the capital goods to the appellant.

2. The facts of the case are that appellant procured the capital goods during the period 1.4.2006 to 11.8.2006 and availed Cenvat credit thereon. Thereafter, they proposed extension of capacity of production and they availed exemption notification No. 49/03 dated 10.6.03 with effect from 29.9.06. In these set of facts, Revenue took a stand that these capital goods were not used by the appellant for manufacturing of dutiable goods at all. Therefore, they are not entitled to take cenvat credit.

3. In these set of facts, proceedings were initiated against the appellant. Cenvat credit on capital goods was denied consequently duty is demanded along with interest and penalty are also proposed. Aggrieved from the said order, appellant is before me.

4. Learned Counsel for the appellant submits that when the appellant procured capital goods during the period 1.4.2006 to 11.8.2006, the appellant was manufacturing dutiable final product. Therefore, they have availed cenvat credit correctly. Later on their product became duty free which does not mean that they are not entitled to take cenvat credit on these capital goods. To support his contention he relied upon the decision of Spenta International Ltd. vs. CCE Thane [2007 (216) ELT 133 (Tri-LB)]. Therefore, it is prayed that impugned order be set aside and appeal be allowed.

5. On the other hand, learned AR opposed the contention of the learned Counsel and submits that these capital goods were never used for manufacturing of dutiable goods, therefore, appellant is not entitled for cenvat credit. To support his contention, he relied upon the decision of Hindustan Coca Cola Beverages Ltd. vs. CCE, Ahmadabad I [2014 (313) ELT 152 (Tri-Ahmd)].

6. Heard the parties. Considered the submissions.

7. In this case, the short issue before me is that whether the appellant is entitled to avail cenvat credit on capital goods procured during the period when their product was dutiable or not. The Larger Bench of this Tribunal in the case of Spenta International (supra) has answered the reference. The relevant date for deciding the credit eligibility is date of procurement of capital goods. Admittedly, on the date when capital goods were procured their final product was dutiable. Therefore, I am of the view that appellant is entitled to take cenvat credit on these capital goods. Reliance placed by learned AR in the case of Hindustan Coca Cola Beverages Ltd. (supra) have no relevance to the facts of this case as in that case, the capital goods were procured before commencement of commercial production, in that case it was the duty of the adjudicating authority to ascertain the usage of capital goods whether the capital goods has been used for manufacturing of dutiable goods or final exempted goods. In this case, it is admitted fact that at the time of procurement of capital goods, the final product manufactured by the appellant was dutiable. Therefore the facts of the case of Hindustan Coca Cola Beverages Ltd. have no relevance to the facts of the present case.

8. As on the date on which the capital goods were procured, the final product was dutiable, therefore, I hold that appellant has correctly taken the cenvat credit on capital goods and they are not required to reverse the same. In these circumstances, I do not find any merit in the impugned order, same is set aside. Appeal is allowed with consequential relief, if any.

(Dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

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