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2017 (4) TMI 548 - AT - Central ExciseReversal of CENVAT credit - the case of Revenue is that as per Rule 11 of CER, 1944 when the finished goods became exempted the appellant was not entitled to the credit of unutilised goods, they were supposed to reverse the credit - Held that: - As per the provisions of cenvat credit on capital goods only if the capital goods is used exclusively for exempted goods credit is not admissible. In the present case after receipt of the capital goods on which credit was denied the finished goods was dutiable. Subsequently, the finished goods became exempted, therefore it cannot be said that the capital goods were used exclusively for exempted goods - Rule 11 is clear that this provision is applicable only in respect of inputs or input services and not on capital goods. Therefore the payment of amount equivalent to the cenvat credit in respect of stock of capital goods as on date of exemption is not applicable in the facts of the present case. Though appellants have paid the amount of cenvat credit but they have filed the appeal before the Commissioner (Appeals) challenging the entire order - it cannot be said that the appellant has not challenged the demand of cenvat credit. Appeal allowed - decided in favor of appellant.
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