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2020 (1) TMI 378 - AT - Central ExciseCENVAT credit - capital goods - capital goods used in the manufacture of dutiable cotton/ denim fabric - capital goods used in the manufacture of Cotton yarn - Rule 6(4) of CCR - Cotton yarn cleared on payment of duty - documentary evidence to prevail over oral evidence - Execution of bond not required in case of export of exempt goods. In any case, it is only a procedural requirement - Cotton yarn captively consumed in manufacture of dutiable denim fabric, as well as cleared on payment of duty - eligible documents under Rule 9(1) of the Credit Rules - Extended period of limitation - interest - penalty. HELD THAT:- The receipt and installation of the capital goods, on which cenvat credit is objected, is not disputed. As regards the error in the address of the particular unit of the assessee company is concerned, this is not a good reason for rejection of the cenvat claim as the invoice is in the name of the appellant company only, and subsequently they have got the error rectified by the supplier of the capital goods. Further, it is not disputed that the machinery in question although being used for manufacture of cotton yarn and cotton fabrics is also capable for manufacturing PV yarn, as certified by the manufacturers / supplier of the machinery. Further, the fact of export is not disputed of the cotton yarn /fabrics, which were removed from the factory without payment of duty and were exported. Even if the capital goods have been partially used for manufacture of dutiable goods or on payment of duty or have been exported (which amounts to removal of goods on payment of duty), the appellant is entitled to cenvat credit on the capital goods in question. The special procedure for removal of dutiable goods under Rule 19 of Cenvat Credit Rules read with Notification No. 42/2001-CE is not applicable for removal of exempt goods for export. As the said Rule, read with notification are only for the purpose of safeguarding the interest of Revenue. Further, Rule 6(4) of Cenvat Credit Rules as substituted w.e.f. 01.04.2016, provides that no cenvat credit shall be allowed on capital goods used exclusively in the manufacture of exempted goods for a period of two years from the date of commencement of commercial production. The appellant fulfils the criteria for availing cenvat credit on capital goods under Rule 3 read with Rule 9(1) of Cenvat Credit Rules, 2004 - under the facts and circumstances, the provision of Rule 6(4) of Cenvat Credit Rules are not attracted, as Rule 6(6)(v) provides that the provision of sub rule (4) shall not be applicable in case the excisable goods removed without payment of duty, are cleared for export under bond in terms of provisions of Central Excise Rules, 2002. As part of the export has taken place under bond ‘LUT’ and certain other consignment have been exported without executing ‘LUT’, claiming the goods as exempted under Notification No. 30/2004, in any case it is settled principle of law that only the goods are exported from the country and not the taxes. The Central Excise law provides for clearance of goods for export, either under bond in which case the terminal excise duty is not paid at the time of clearance from the factory, but in the terms of the bond the manufacturer is obligated to export the goods and get the bond discharged - As the export of goods is not doubted, this Tribunal is of the view that the benefit of Rule 6(6)(v) is required to be extended to the appellant. Accordingly, it is held that the appellant manufacturer is entitled to cenvat credit on capital goods, used partially for export even though domestic clearance are exempt. The appellant is entitled to cenvat credit on the capital goods in question - Appeal allowed - decided in favor of appellant.
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