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2019 (2) TMI 1482 - AT - Central ExciseCENVAT Credit - exempt goods - case of Revenue is that since LDPE pipes according to appellant are classifiable under 8424 9000 and are unconditionally exempted, the appellant assesse’s option of paying central excise duty on LDPE pipes cleared to dealers is in violation of provisions of Section (1A) of Section 5(A) of Central Excise Act and CENVAT credit availed on capital goods, inputs and input services which are exclusively used in the manufacture of exempted goods needs to be reversed - Held that:- There is no dispute on the classification of the products of LDPE pipes attached with sprayer for projecting, dispersing or spraying liquids etc. under chapter 8424. The only dispute is regarding the LDPE pipes which were cleared for other than agricultural and horticultural purposes. According to appellant assessee, these LDPE pipes are cleared to their dealers for other than agricultural and horticultural purposes, would merit classification under chapter 3917 and is liable for Central Excise duty and no exemptions are available hence they have correctly availed the benefit of CENVAT credit of the duties paid on LDPE granules, input services and capital goods. The appellant assessee had been reversing 10% of the value of exempted goods cleared by them correctly so, by following the provisions of Rule 6 of CENVAT Credit Rules, 2004 - when LDPE pipes are not cleared for agricultural and horticultural purposes, appellant’s claim that these products are liable to Central Excise Duty as being classifiable under chapter 39 seems to be correct proposition of the law and we accept the same. Appeal allowed - decided in favor of appellant.
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