COMMISSIONER OF CENTRAL EXCISE. Vs. PROGRESSIVE SYSTEMS

JUDGEMENT

(1.) THIS appeal is by the Revenue challenging the order passed by the Tribunal 2010 (251) E.L.T. 536 (Tri. -Bang.) which granted the benefit of Cenvat Credit to the Assessee, setting aside the order passed by the lower authorities.

(2.) THE Assessee is a manufacturer of excisable goods, i.e., machine tools falling under Chapter 84 of the I Schedule to the Central Excise Tariff Act, 1985. They were registered under the Central Excise on 16 -4 -2007 for manufacture of excisable goods. They availed Cenvat Credit of Rs. 12,62,621/ - in respect of certain capital goods which were procured in the year 2006 -07 and 2007 -08. Proceedings were initialed against the Assessee on the ground that they have availed Rs. 6,31,311 -00 Cenvat Credit, to which they were not entitled to. On being communicated the Assessee reversed the amount of Rs. 6,31,311 -00 under protest. Therefore an order came to be passed under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11A of the Central Excise Act, 1944, demanding the aforesaid amount. Aggrieved by the same the Assessee preferred an appeal. The appellate authority affirmed the said order. Aggrieved the Assessee preferred an appeal to the Tribunal. The Tribunal held that Rule 3(1) of the Rules governs availment of credit of various types of duties. There is no bar in an SSI unit taking Cenvat credit on inputs or capital goods received dining 2006 -07. The SSI unit can accumulate capital goods credit till it exhausts the exempted value of clearances and starts paying duty, therefore. The Tribunal held that as per Rule 4(2) of the Rules an Assessee can avail capital goods credit up to 50% in the year of receipt of the goods and balance in subsequent financial years. There is no prescription that credit to any extent has to be availed in the year of receipt of capital goods. In the instant case, entire credit has been availed in 2007 -08, the year following receipt of the goods. The said availment is not inconsistent with the legal provisions. Therefore the Tribunal set aside the impugned order and allowed the appeal granting relief to the Assessee. Aggrieved by the same, the Revenue has preferred this appeal.

(3.) PER contra, the learned Counsel for the Assessee supported the impugned order.