TMI Blog2007 (2) TMI 493X X X X Extracts X X X X X X X X Extracts X X X X ..... in addition to exempted products. It is the contention of the Revenue that when the appellants manufacture only exempted products, they are not entitled for any Cenvat credit. This issue was the subject matter of dispute in the case of Rochi Ram Sons[ 2003 (3) TMI 160 - CEGAT, NEW DELHI] . In the said case, the Tribunal has ruled that Cenvat credit cannot be disallowed if the assessee manufactures for a part of the year only exempted goods when it has all along the intention to manufacture both exempted and dutiable goods. In other words, the period cannot be segregated into two parts. It was further held that Rule 57AD(2) of erstwhile CE Rules (Present Rule 6 of Cenvat Credit Rules), does not require the assessee to manufacture, on day t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As the duty demanded cannot be sustained in terms of law, no interest is leviable. Therefore, no penalty can be levied. In these circumstances, we allow the appeals with consequential relief, if any. - Dr. S.L. Peeran, Member (J) and Shri T.K. Jayaraman, Member (T) Shri G. Shiva Dass, Advocate, for the Appellant. Shri K. Sambi Reddy, JDR, for the Respondent. ORDER These appeals have been filed against the OIO No. 11/05-06 (RP) dated 12-8-2005 passed by the Commissioner of Customs Central Excise, Visakhapatnam-I Commissionerate. 2. In the impugned order, the Commissioner has disallowed Cenvat credit of Rs. 3,50,04,285/- on the inputs lying in stock and inputs contained in finished goods lying in stock as on 19-2- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of 8% is paid, there is no need to reverse the Cenvat Credit. The following decisions were also relied on :- (a) Escorts Ltd. v. CCE, Faridabad - 2004 (176) E.L.T. 817 (Tri. - Del.) (b) M/s. Hetero Drugs (sic) (Hetero Labs Ltd. - 2005 (192) E.L.T. 716 (T) Final order No. 572 to 576/2005 dated 7-4-2005 read with Misc. Order No. 262 263/2005 (c) Koya Company Construction Pvt. Ltd. v. CCE, Hyderabad - Final Order No. 1198/2005 dated 8-7-2005 (iii) Further, w.e.f. 20-2-2004, the appellants manufactured Pipes which were cleared by availing exemption and on payment of an amount of 8% of the sale value. It is the department s contention that the Modvat credit of Rs. 3,50,04,285/- attributable to inputs l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacture, on day to day basis, both dutiable and exempted goods. In our view, the above ruling of the Tribunal is applicable to the present case. Hence, Cenvat credit is not deniable on that count. 5.1 As regards the reversal of credit on inputs lying in stock as on 19-2-2004, we find that once the credit is legally earned, it is not necessary to reverse the same consequent to a later exemption of notification. That view has been held in the case of CCE v. Ashok Iron Steel and also TAFE Ltd. v. CCE vide Final Order dated 23-11-2006. The ratio of the above cases is squarely applicable. In these circumstances, the demand made by denying the Cenvat credit, is not in order, as the appellants had already paid 8% of the sale value of the go ..... X X X X Extracts X X X X X X X X Extracts X X X X
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