BHARAT FORGE LTD. Vs. COMMISSIONER (APPEALS) CENTRAL

JUDGEMENT

(1.) AS per facts on record appellant imported capital goods in the year 1996 and 98. No credit of duty was availed inasmuch as during the relevant period credit in respect of capital goods was available only on their installation. The capital goods were installed during the period May to October 2000 and the appellant took the Cenvat Credit of 100% duty paid on the said capital goods. Thereafter the goods were transferred to their another plant under the provisions of Rule 57AB(1)(b), on payment of duty.

(2.) THE dispute involved in the present appeal is as regards 100% taking of credit. The Revenue's contention is that said credit has been taken in contravention of the provisions of Rule 57AC, which provide for taking of 50% credit during the financial year and the balance 50% has to be taken in the subsequent financial year provided the capital goods are in possession and use of manufacturer.

(3.) IT has been contended before us that up to 1.4.2000 when the Central Excise Rules relating to modvat credit were repealed and replaced by a fresh set of rules relating to cenvat credit, there was provision [in Rule 57Q(8)(ii)] for entire credit to be taken even in respect of uninstalled goods which were intended to be removed because duty not less than the credit that had been taken is required to be paid. Subsequently, on 1.4.2000 the Cenvat Rules, which were newly introduced, provided simultaneously for taking full credit on capital goods, which were removed as such, and for paying duty on such goods as if they were manufactured in the factory. It is only in between this period, he contends, that there was no provision for taking full credit on capital goods, which were removed. He contends that it is iniquitous that a manufacturer can take only 50% credit and has to pay the entire amount while removing these goods, which have not been utilized. He emphasizes that at Mundhwa factory, to which the goods were removed, only 50% credit was taken. They also relied upon the Tribunal decision in the case of Hindustan Lever Ltd. v. Commissioner of Central Excise, Pondicherry.