TMI Blog2009 (9) TMI 545X X X X Extracts X X X X X X X X Extracts X X X X ..... ll clearance of the final product, the appellants had sought to claim the exemption in terms of the Notification No. 30/2004-C.E., dated 9-7-2004 in relation to the specified goods classifiable under Headings No. 5509 and 5510. The Notification clearly imposed a condition that the benefit thereunder could not availed in respect of the goods for which credit of duty on inputs had been taken under Cenvat Credit Rules, 2004. The dispute relates to the denial of benefit under the Notification No. 30/2004-C.E., dated 7th July, 2004. Held that- benefit of notification no. 30/204-C.E. denied as furnance oil used in generation of steam for power and credit availed on it was not reversed till clearance of final product. Thus, the appeal has dismisse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n falling under Chapter Headings No. 55.09 and 55.01 of the Central Excise Tariff Act, 1985. During the course of scrutiny of ER-1 returns filed by the appellants, it came to the notice of the Department that the appellants had not reversed the credit availed on the Furnace Oil. The furnace oil was one of the inputs used in the manufacture of steam for generation of power which in turn was being used in the manufacture of final product by the appellants. In spite of such failure to reverse the credit of duty till clearance of the final product, the appellants had sought to claim the exemption in terms of the Notification No. 30/2004-C.E., dated 9-7-2004 in relation to the specified goods classifiable under Headings No. 5509 and 5510. The No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2007. In relation to other inputs, the credit was reversed at the time of clearance of the final products. Being so, according to the learned Advocate for the appellants it cannot be said that the credit was in any manner utilised by the appellants. The credit having not been utilised by the appellants, the benefit under the said notification could not have been denied. 6. The dispute relates to the denial of benefit under the Notification No. 30/2004-C.E., dated 7th July, 2004. In order to enable the assessee to claim the benefit under the said notification, he should refrain himself from taking the credit of duty paid on the inputs which are utilised for manufacture of the final products, in respect of which the exemption is sought to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it of duty paid on inputs used in the manufacture of the final products on which duty will have to be paid. This can be done only if the credit of duty paid on the inputs used in the exempted products is debited in the credit account before removal of the exempted final products". It is pertinent to note that both the rulings in Chandrapur Magnet Wires (P) Ltd. by the Apex Court as well as by the Allahabad High Court in Hello Minerals Water (P) Ltd. were delivered in relation to the matters pertaining to the period prior to incorporation of Rule 57CC in the Central Excise Rules, 1944. The necessity for reversal of the Cenvat credit to avail on the inputs utilised in the final products prior to clearance of the final product, in case of fail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the stage of exemption. Similarly, on payment of duty on the input (yarn) the assessee got the credit which was never utilized. That before utilization, the entry has been reversed which amounts to not taking credit. Hence, in this case, both the conditions are satisfied. Hence item no. 1 of the table to Notification No. 14/2002-C.E. would apply and accordingly the grey fabrics would attract nil rate of duty." 10. It was however, sought to be contended by the learned Advocate for the appellants that mere taking credit would not amount to utilisation thereof. The concept of Cenvat credit discloses that the amount of duty which is payable to the Government is allowed to be utilised for certain benefits in relation of another duty liabi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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