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February 2015

2015-TIOL-142-CESTAT-MUM Bombay Paints Ltd vs. Commissioner of Central Excise, Mumbai- II

By Puloma Dalal, Jayesh Gogri, Mandar telang Chartered Accountants
Reading Time 1 mins
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Full credit availed on capital goods in the first year itself instead of 50%, at the most liable for interest, seeking reversal of credit and imposition of penalty is not warranted.

Facts:
The Appellant took 100% credit on capital goods used in manufacture. CENVAT Credit was denied to the extent of 50% and interest and penalty was also imposed.

Held:
Although, CENVAT Credit entitled was 50% in the first year instead of 100%, however the remaining credit of 50% is available in the subsequent year therefore at the most interest for the intervening period can be demanded and demand for duty and penalty was set aside.

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