Commissioner of Central Excise & S.Tax, Rourkela Central Revenue Building, Rajaswa Vihar, Bhubaneswar7 Odisha ....Respondent (s) Appearance: Shri Rajeev Kr. Agarwal, C.A. for the Appellant (s) Shri S. Mukhopadhyay, A.R. for the Respondent(s) HON'BLE SHRI P.K.CHOUDHARY, MEMBER(JUDICIAL) Date of Hearing : 11.06.2019 Date of Pronouncement : 04.07.2019 FINAL ORDER NO. :FO/A/75772/2019 PER SHRI P.K.CHOUDHARY The appellant assessee is in appeal against the OrderinAppeal dated 22.03.2018 upholding the decision of the Original authority vide OrderinOriginal dated 30.01.2017 wherein CENVAT credit of Rs. 27,31,354/ has been disallowed on capital goods. Vide the said Orderin Original, equivalent penalty has also been imposed with applicable interest. 2 Ex. Appeal No. 77137/2018 2. Briefly stated, the facts of the case are that the appellant, M/s. Mahanadi Coalfields Limited, is a subsidiary of Coal India Limited is engaged in the business of manufacturing and selling of coal. Levy of Central Excise duty was imposed for the first time w.e.f. 1st March, 2011, through the Finance Act, 2011 wherein the Tariff rate of goods falling under Chapter 27.01 (i.e. 'Coal') was made 5% against the 'NIL' rate. Prior to the said rate, Coal had always been subject to 'NIL' rate of Central Excise duty. A concessional rate of central excise duty of 1% was also provided from the aforesaid date, if the assessee did not avail the benefits of CENVAT credit. In the instant case, the appellant chose to pay duty at the normal tariff rate of 5% with simultaneous benefit of CENVAT credit facility in terms of CENVAT Credit Rules, 2004 ('CCR'). The appellant received an excavator machine on 17.02.2011 in a knocked down condition, which was assembled and was ready for use on 17.06.2011. DRR/ GRN was prepared on 17.06.2011 when goods were finally accepted as per the practice followed by the appellant, being a PSU unit. Accordingly, the said goods (excavator) were recorded in the books of account on 17.06.2011, based on which the said date of 17.06.2011 was shown in the CENVAT credit register. A Show Cause Notice dated 02.06.2016 was issued alleging that they have taken irregular credit of Rs.27,31,354/ since the capital goods were received on 17.02.2011 on which date coal was not subject to duty. The said SCN culminated into OrderinOriginal dated 30.01.2017. Appeal filed before the Commissioner (Appeals) was rejected by upholding the adjudication order. Hence, the present appeal before the Tribunal. 3. Shri Rajeev Kr. Agarwal, CA, appeared on behalf of the appellant and Shri S. Mukhopadhyay, A.R. appeared on behalf of the respondent department. 4. The Ld. CA appearing for the appellant submitted that the "Excavator" was received by them on 17.02.2011 in a knocked down condition and was available for use only on 17.06.2011. Accordingly, GRN 3 Ex. Appeal No. 77137/2018 receipt was prepared and the said goods was recorded in the books on 17.06.2011 when the CENVAT credit was availed. He submitted that as per Rule 4(2)(a) of CCR, CENVAT credit can be availed in respect of capital goods received in a factory at any point of time in a given financial year. He placed reliance on the ratio of the decision of Hon'ble Madras High Court in the case of Kaleesuwari Refinery Pvt. Ltd. v. CESTAT, Chennai [2016 (340) ELT 632 (Mad.)], wherein it has been observed that as per Rule 4(2)(a) of CCR, the assessee is liable to claim CENVAT Credit on capital goods at any time during the year subject to the condition that the goods to be manufactured out of them should not be exempted goods. Relevant para of the judgment is given below: "..26. Coming to the core issue on hand, as we have pointed out earlier, the expression "financial year" appearing in Rule 4(2)(a) cannot be rendered redundant or nugatory. The capital goods were received admittedly during the financial year 200203. The main final product, namely refined edible oil was exempt from paym