COMMISSIONER OF CENTRAL EXCISE Vs. ECOBOARD INDUSTRIES LTD.

JUDGEMENT

(1.) IN this appeal of the Revenue, the short question to be considered is whether CENVAT credit to the extent of 50% availed by the respondent in respect of capital goods in 2005 -06 could be allowed. They could not take the first 50%; of the duty paid on the capital goods as CENVAT credit in the previous year (2004 -05) as their final products were fully exempt from payment of duty during that period. The original authority, in adjudication of a show -cause notice, denied to the assessee CENVAT credit of Rs. 76,153/ - availed by them in 2005 -06. It also imposed equal amount of penalty on them under Section 11AC of the Central Excise Act. The appeal filed by the assessee against the order of adjudication was allowed by the Commissioner (Appeals). Hence the present appeal of the department.

(2.) LEARNED SDR has reiterated the grounds of this appeal. In their written submissions, the respondent submits that their claim for CENVAT credit is fully covered by two decisions of this Tribunal, viz. Ace Timez v. CCE, Bangalore : 2004 (170) ELT 371 (Tri. -Bang.) and Keihin Fie Pvt. Ltd. v. CCE, Pune -III : 2007 (213) ELT 637 (Tri. -Mumbai). The lower appellate authority also relied on these decisions of the Tribunal. In either of these cases, the assessee had not availed 50% of the CENVAT credit on capital goods during the first financial year in which the goods were received in their factory. One of the parties availed 100% credit in the next financial year, while the other party chose to avail 50% credit in the next financial year. In both the cases, it was held that there was no bar against availment of CENVAT credit in the second financial year to the extent of 50% where the benefit was not availed in the first financial year. The present appeal of the department is silent on the two crucial decisions of the Tribunal, which were relied on by the lower appellate authority. In the memo of appeal, there is mention of a few other decisions of this Tribunal, but there is no elaboration.