COMMISSIONER OF C EX , LUDHIANA Vs. PERFECT SYNTHETICS

JUDGEMENT

(1.) Revenue has filed this appeal under Section 35G of the Central Excise Act, 1944 (for short "the Act") against the order of the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (for short "the Tribunal"), dated 4-3-2004 (Annexure P-3).

(2.) The assessee is engaged in the manufacture of Texturised Polyester yarn and was availing facility of Cenvat credit on capital goods under Rule 57AB of the Central Excise Rules, 1944 (for short "the Rules"). It purchased old machinery falling under Heading 84.44 in the month of July, 2000, under Invoice Nos. 124 to 132 dated 8-6- 2000, valued at Rs. 28 lacs from M/s. Deviyani Tex. Chem. Pvt. Ltd. Central Excise Duty amounting to Rs. 10,13,518/- was paid on it. The assessee claimed Cenvat credit of Rs. 5,06,759/- (50% of Rs. 10,13,518/-). The Assistant Commissioner, on scrutiny of the record, observed that as per Explanation to sub-rule 57AB(1)(B) of the new Cenvat Rules, the Excise Duty on the sale of machinery was payable at the rate of 16% only, which, on the sale price of Rs. 28 lacs, worked out to Rs. 4, 48,000/-. He, therefore, observed that out of the sum of Rs. 10,13,518/- paid as Excise Duty, only Rs. 4,48,000/- could be treated as Central Excise Duty and the excess amount of Rs. 5,65,518/- paid by the supplier could not be considered as Central Excise Duty. He was, thus, of the view that the assessee was entitled to Cenvat credit of Rs. 2,24,000/- only (50% of Rs. 4,48,000/-) instead of Rs. 5,06,759/- claimed by it. Accordingly, he disallowed the credit of Rs. 2,82,759/- (506759-224000) and ordered its recovery from the assessee under Rule 57AH of the Rules. The action of the Assistant Commissioner was upheld in appeal by the Commissioner (Appeals).

(3.) Assessee filed further appeal before the Tribunal which vide the impugned order has accepted the claim of the assessee in the following terms :-