Excise – Cestat Ahmedabad: Issue of availment of 100% credit on capital goods in one FY - Even if the goods are considered as capital goods, at best the demand can be only for interest (and not penalty) for the period during which excess 50% credit was availed, it cannot be for the full amount of Cenvat credit that has been taken – Appeal allowed by way of Remand [Order attached]
Order Date – 06 January 2023
Parties: Yamir Packaging Pvt. Limited Vs Commissioner of Central Excise & ST, Vadodara
- The Appellant, Yamir Packaging Pvt. Limited, had availed 100% Cenvat credit on wooden dies, aluminum litho plates and rubber blanket under the category of inputs.
- It was found that they were entitled to credit of 50% in the first year and 50% in the next financial year even if the goods are considered as capital goods.
- Whether the appellant is required to reverse the cenvat credit?
- The Tribunal relied on the decision of the Tribunal in the case of Guardian Plasticote Limited vs.CCE, Daman in which it was held that even in respect of capital goods, the credit is available to the extent of 100% but in two financial years. Therefore there is a need to re-quantify the demand and it has to be limited only to the interest. For these two purposes, the matter has to be remanded back to the Original Adjudicating Authority.
- The Tribunal also held that the nature of goods being capital goods or inputs, can be a matter of opinion.
- The Tribunal held that relying on the above decision and the fact that the learned Counsel has admitted that they are ready to pay interest for the disputed period, the appeal is partly allowed.
- The appeal is allowed by way of remand.