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2018 (7) TMI 1366 - AT - Central Excise100% EOU - Refund of unutilized CENVAT Credit - rejection of refund on the ground that certain inputs were procured by the appellant on payment of duty, when the same goods were covered under N/N. 22/2003 dated 31.03.2003 and have been procured without payment of any duty - Whether the appellant is entitled to CENVAT credit of duty paid on inputs procured by them for use in the manufacture of final product in the EOU? Held that:- Section 5A(1A) is applicable to those cases where the exemption is granted absolutely - Circular dated 26.11.2010 has referred to the Notification No. 29/2004 dated 09.07.2004 which has granted exemption to various textile articles. It has been explained that the manufacturer cannot opt to pay duty under the above notification and he cannot avail cenvat credit of duty paid on inputs. The appellant, being EOU was entitled to procure inputs without payment of duty under N/N. 22/2003. A reference to this notification indicates that the exemption is granted subject to various conditions including the condition that the procedure contained in Central Excise (Removal of Goods at Concessional Rate of Duty for manufacture of Excisable Goods) Rules, 2001. The above clearly reveals that the exemption is conditional and is not absolute - provision of Section 5A(1A) as well as the Circular dated 26.11.2010 are not applicable for procurement of goods under N/N. 22/2003. The appellant will be entitled to consequential refund under Rule 5 of CCR subject to satisfying the conditions prescribed therein - appeal allowed - decided in favor of appellant.
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