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2005 (6) TMI 165 - CESTAT, BANGALORECenvat/Modvat - inputs used in the manufacture of machine - Notification 67/95-C.E. - job work - demand duty - Interest - Penalty - HELD THAT:- We have gone through the records of the case carefully. The appellants received certain dutiable inputs and manufactured machines. They utilised these machines for job work. After job work, the goods were sent under 57F(4) Challan to the principal manufacturers. The department is of the view that the machines manufactured by the appellant are exclusively used in the manufacture of the exempted goods. Therefore, the inputs are not entitled for Cenvat credit. In other words, the department is equating goods sent under 57F(4) challan with exempted goods. This is not correct. The goods, which are sent to principal manufacturer, are not exempted goods. Ultimately, they would be cleared on payment of duty. Hence, the reasoning adopted by the department is not correct. Moreover, all the case laws cited by the appellant are very relevant in deciding this issue. In the case of KSH International [2004 (1) TMI 721 - ITAT MUMBAI], the Tribunal rejected the Revenue appeal and held that clearance of goods on job work does not amount to clearance under full exemption or at Nil rate of duty. The ratio of this decision is squarely applicable to the present case. Thus, we allow the appeal and set aside the impugned order.
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