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2018 (8) TMI 469 - AT - Central ExciseRecovery of cenvat credit - demand on the ground that the finished goods were not fully exempted from excise duty Notification No.8/2004-CE dated 21.01.2004, as amended, provided exemption only from basic excise duty, additional excise duty of Goods of Special Importance Act, 1957, but did not provide any exemption to the additional duty payable under the Finance Act, 2005 and education cess payable on such additional duty - Notification No. 8/2004-C.E., dated 21.1.2004. Held that:- The Government of India had announced a special scheme of incentives in excise duty in 1999. Accordingly, Notification No.32/99 and 33/99 dated 08.07.1999, were issued by the Ministry of Finance, Department of Revenue to provide exemption from excise duty, on specified goods, manufactured in specified areas of North East. The exemption was on the excise duty payable on value addition. This exemption was given effect to by way of providing refund of the excise duty paid by the manufacturer through PLA, i.e., in cash. Under the Cenvat Credit Rules, the credit is admissible as soon as the essential conditions are specified. In the case of National Calamity Contingent Duty, it is the condition that credit of no duty, other than the credit in respect of NCCD itself can be used for payment of such duty under Rule 3(4) of the Cenvat Credit Rules, 2004 - The words “exempted goods” appearing in Rule 6 of the Cenvat Credit Rules are to be read and interpreted in the relevant context. It is not the correct interpretation that when a product is chargeable to different kinds of excise duties, the words “exempted goods” refer only to exemption from basic excise duty. The words ‘exempted goods’ refer only to a situation where the goods are exempted from all kinds of excise duties in so far as Rule 6(1) of the Cenvat Credit Rules, 2004 is concerned. If the Cenvat credit is denied in respect of inputs and capital goods merely on the interpretation that basic excise duty on the finished goods is exempted, then it would lead to an anomalous situation. It is found from the records that the appellants have been depositing the entire amount of excise duty payable on the finished goods in the ESCROW account. The Cenvat Credit being a beneficial scheme, the benefit intended to the manufacturer cannot be denied. As such the appellants are entitled to take credit of the excise duty paid on inputs or capital goods. Appeal allowed - decided in favor of appellant.
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