- (1.) HEARD Sri A.P. Mathur, learned counsel for the appellant and Sri Shailendra Jaiswal, Advocate holding brief of Sri Vinod Kant, learned counsel for the respondent. This appeal under Section 35G of the Central Excise Act, 1944 has been filed against the judgment and order passed by the Customs, Excise & Service Tax Appellate Tribunal dated 1 -5 -2008 in Excise Appeal No. E/432/2007 [2008 (232) E.L.T. 475 (Tri. -Del.)].
(2.) THE appeal has already been admitted vide order dated 8 -3 -2010 [2010 (256) E.L.T. A158 (All.)]. The facts of the case has been noted by the Tribunal in its judgment and order dated 1 -5 -2008 which needs no repetition except few facts as noted hereinbelow: - - The appellant has received capital goods during the period from September, 2004 to April, 2005 and have taken Cenvat credit of duty paid on the capital goods. The dispute relates only to one machine which was imported by the assessee which was used for manufacture of pulp based product, namely, 'Maaza' which is exempt from whole of the duty of excise. From October, 2006, the appellant also used the machine for dutiable goods. A demand -cum -show cause notice dated 30 -3 -2006 was issued asking the appellant as to why demand should not be issued and recovery be made under the provisions of Rule 14 of the Cenvat Credit Rules, 2004 read with the proviso to Section 11A of the Central Excise Act, 1944 and interest be not demanded as well as penalty. Show cause notice also mentioned that as to why extended period of 'five years' as provided under proviso to Section 11(A)(1) of Central Excise Act, 1944 should not be invoked as they have suppressed the facts as mentioned above and availed credit on duty of capital goods exclusively used in the manufacture of exempted goods. The Commissioner Central Excise vide order dated 15 -11 -2006 confirmed the demand directing for payment of interest as well as imposition of penalty for which judgment was appealed before the Tribunal. The Tribunal by the judgment dated 1 -5 -2008 affirmed the order of the Commissioner against which this appeal has been filed.
(3.) SRI A.P. Mathur, learned counsel for the appellant in support of the appeal submitted that the machine which was installed in the factory was capable of both manufacture of dutiable goods as well as exempted goods, hence Cenvat credit was rightly availed. He submits that the Tribunal committed error in taking the view that the appellant could not have taken the benefit since the machine was capable of being used for dutiable products only after modification. He submits that although a certificate dated 4 -1 -2007 from the manufacture was filed before the authorities but he submits that to make things clear the appellant now obtained another certificate dated 25 -9 -2009 which has been annexed along with supplementary affidavit in this appeal which clearly provides that no such modification can be done in India since machines are manufactured in Germany and imported in India. He submits that Tribunal mistook minor adjustment as minor modification, whereas the minor adjustment in machine is not any modification in the machine. He further submits that it is admitted fact that from October, 2006 the appellant has used machine for manufacture of dutiable goods, hence in the financial year in which the benefit was taken, to which machine was used, both for dutiable goods and exempted goods, permitting the appellant rightfully claim the benefit of Cenvat credit. He submits that credit can be denied as per Rule 6, sub -rule (4) of Cenvat Credit Rules, 2004 only when machine is exhaustively used for manufacturing of exempted goods.;