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2015 (10) TMI 2586 - CESTAT NEW DELHICENVAT credit - 100% EOU - manufacture of Polypropylene Multi Filament Yarn, falling under Chapter 54 of the First Schedule to the Central Excise Tariff Act, 1985 - Rule 3 (7)(a) of the Cenvat Credit Rules, 2004 - Held that: - N/N.23/2003-CE dated 31.02.2003 permits the EOU Units for payment of Central Excise Duty equivalent to the special additional duty leviable under Section 3 (5) of the Customs Tariff Act, 1975. The payment of duty under the prescribed rate is subject to fulfilment of condition that the goods supplied to the units in DTA are not exempt from payment of tax levied by the State Government. In the present case, it is a fact on record that the goods were supplied by M/s. Reliance Industries Ltd. a 100% EOU Unit to the appellant on payment of Central Sales Tax (CST) levied and collected under the Sales Tax Statute. Since, supply of goods from M/s. RIL to the appellant has suffered payment of CST, in my opinion, the appellant falls under the purview of Sl.No.1 of Notification dated 31.02.2003. Thus, the formula prescribed in Rule 3 (7) (a) of the Cenvat Credit Rules, containing the stipulation for taking of cenvat credit will have no application and the appellant will be entitled for the full cenvat credit of Central Excise duty paid and reflected by the EOU unit in its invoices. I also find that condition No.2 itemized in the Notification dated 31.02.2003 is subject to observance of the procedures laid down in Clause (a), (d), (e) and (g) of paragraph 6.8 in the Foreign Trade Policy- 2004-09. However, in the present case, since the supplier M/s. Reliance Industries Ltd. has opted for payment of duty under the conditions itemized in clause (h) in the FTP (supra), the case squarely falls under Sl.No.1 in the said Notification, for which the embargo/restriction created in the Rule 3 (7) (a) of the cenvat credit rule will have no application. I am of the considered opinion that the impugned order is not legally sustainable. Therefore, the same is set aside and the appeal is allowed in favour of the appellant.
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