JUDGMENT N. Kumar, J.—This reference is made to this Court by the Tribunal at the instance of the Revenue to consider the following question of law: Whether CEGAT has committed an error in allowing the Modvat Credit under Rule 57Q, on capital goods which are exempted from duty by not taking into consideration Rule 57R(1) of Central Excise Rules, 1994 which clearly mentions that the credit of specified duty paid on capital goods shall not be allowed if such capital goods are used exclusively for production of final product which is exempt from the whole of the duty of excise leviable thereon or is chargeable to Nil rate of duty ?" 2. The assessee M/s Kailash Auto Builders Limited, are engaged in manufacture of motor vehicles for transport of goods falling under Chapter heading 8704 of CETA 1985. They have availed Modvat credit amounting to Rs. 1,29,044 in respect of capital goods received by them under Rule 57Q of the Central Excise Rules, 1944. The Assistant Commissioner who adjudicated the proceedings held that the assessee is manufacturing and clearing public transports falling under Chapter 8704.00 of the Schedule of the Central Excise Tariff Act, 1985 claiming exemption under Notification 162/86, dated 01.03.1985. The credit of duly paid on capital goods is admissible only when the capital goods are used in the manufacture of final products which are chargeable to Central Excise duty. In the instant case as the assessee is not manufacturing any final product which are cleared on payment of duty, he disallowed the credit of Rs. 1,29,044 and ordered recovery of the same. 3. Aggrieved by the same, the assessee preferred an appeal before the Commissioner of appeals. The Commissioner of appeals dismissed the appeal upholding the order of the Assessing Authority. Aggrieved by the same, the assessee preferred an appeal to the Tribunal. The Tribunal relying on the earlier order dated 30.10.2001 passed in the case of the very same assessee, held that the assessee has not utilized the credit of duty for clearing the exempted goods. They have claimed credit only in respect of excisable goods. Once credit on capital goods is availed the same could be made use of at the time of acquiring the excisable goods. Therefore the Tribunal set aside the order passed by the lower authorities and granted the benefit of availing the credit. They have claimed credit only in respect of excisable goods. Once credit on capital goods is availed the same could be made use of at the time of acquiring the excisable goods. Therefore the Tribunal set aside the order passed by the lower authorities and granted the benefit of availing the credit. Aggrieved by the said order, the present reference is filed. 4. Heard the learned Counsel for the parties. 5. It is not in dispute that the capital goods were purchased for the purpose of manufacturing the products in the assessee's factory. At the time of purchase, the excise duty was paid by the assessee on the said capital goods. After such purchase, the capital goods are used in the manufacture of both exempted goods and capital goods. In respect of exempted goods, as there was no liability to pay excise duty, the question of availing Cenvat credit in respect of exempted goods did not arise. However, in respect of excisable goods, the duty payable thereon was not paid and the Cenvat credit was utilized. In the entire material on record, there is nothing to indicate that the capital goods were purchased with any undertaking that the said goods will be used exclusively for the manufacture of exempted goods. In the absence of any such undertaking, when admittedly the capital goods are used for manufacture of both excisable goods and exempted goods, merely because in the beginning the capital goods were used in manufacture of exempted goods, the assessee cannot be denied the benefit of Cenvat credit when they started manufacturing excisable goods and clearing the said goods. There is no period of limitation prescribed for availing the Cenvat credit. Once the duty is paid on the capital goods, the assessee would get a right to avail the Cenvat credit if and when they have to pay duty on excisable goods. 6. Under these circumstances, the Tribunal was justified in holding that the assessee is entitled to avail the benefit of Cenvat credit, while clearing the excisable goods. Therefore the demand by the Department was unjustified. Accordingly, we answer the question of law in favour of the assessee and against the revenue.