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2016 (1) TMI 1313 - AT - Central ExciseMODVAT/CENVAT credit - final product cleared without payment of duty - explosives - appellant submits that removal of goods under Chapter X Procedure is neither exempted goods nor attracts nil rate of duty. Thus, the embargo created in Rule 57 C of the Rules will have no application and taking of Modvat credit on the inputs used for manufacture of explosives removed under Chapter X is correct - Held that: - Rule 57C of the Central Excise Rules, 1944 prohibits taking of cenvat credit on the inputs used in the manufacture of final product, which are exempted from whole of duty of excise leviable thereon or are chargeable to nil rate of duty. In the present case, explosives removed from the factory under chapter X Procedure is exempted from the whole of duty of excise leviable in terms of N/N.191/87 dated 04.08.1987. Since the said Notification exempts explosives from payment of duty, the embargo created in Rule 57C of the Central Excise Rules, 1944 will be applicable in the present case, and thus, Modvat credit on the inputs used in the manufacture of the said exempted product is not available to the manufacturer. Appeal dismissed - decided against appellant.
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