TMI Blog2013 (12) TMI 815X X X X Extracts X X X X X X X X Extracts X X X X ..... 1), as contained in Rule 6(5) of CENVAT Credit Rules, 2002 and Rule 6(6) of CENVAT Credit Rules, 2004, used in the manufacture of such goods, if the goods are exported - As per Rule 5 of CENVAT Credit Rules, 2004 a manufacturer, who exports the final products which are exempt from duty, can claim refund of CENVAT - The orders for rejection of the refund claims and also for the demand the Cenvat credit is ineligible. Rejection of refund claim - Services utilised for export of goods – Held that:- For export of goods, no tax is charged and there are also provisions of receiving inputs and services without payment of any duty or tax which are consumed in the manufacture of goods for export - refund claims and Cenvat credit cannot be denied b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Notification No. 30/2004-C.E. dated 9.7.2004 concluding that the provisions of Rule 6 of the Cenvat Credit Rules are attracted and the appellant is not eligible for Cenvat credit, show-cause notices were issued to the appellant. The appellant contested the show-cause notices on merits. The adjudicating authority after following the due process of law confirmed the demands raised on the appellant as having availed ineligible Cenvat credit, demanded interest thereof and also imposed penalties. Aggrieved by such orders, the appellant preferred appeals before the first appellate authority. The first appellate authority also came to the same conclusion and upheld the orders of the adjudicating authority. During the interregnum period refun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid on inputs. It is submission that the spirit of the law has to be appreciated inasmuch as, if Cenvat credit on the duty paid inputs were prohibited, the same analogy to be applied to the Cenvat credit of service tax paid on the services which were utilised for export of goods cleared after availing exemption. 5. We have considered the submissions made at length by both sides and perused the records. 6. On perusal of the records, we have noted that the appellant has been taking a consistent plea before the lower authorities that Cenvat credit availed by them and subsequently refund applications filed are for those services which were utilised by them for the purpose of export of goods. It is also noted that the appellant had not ente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leather into finished leather. 9. Rule 3 of the CENVAT Credit Rules, 2004, as also Rule 3 of CENVAT Credit Rules, 2002, which have been repealed by the Rules of 2004, provide for credit of CENVAT paid by a manufacture on any inputs or capital goods received in a factory for use in or in relation to the manufacture of final products. Rule 6(1) of the extant Rules as also the repealed Rules, says that CENVAT credit shall not be allowed on such quantity of inputs which is used in the manufacture of exempted goods. Sub-rule (5) of Rule 6 of the repealed Rules, 2002 and sub-rule (6) of Rule 6 of the extant Rules of 2004 are an exception to Rule 6(1). Sub-rule (5) (vi) of the repealed Rules, provided that sub-rules (1), (2), (3) and (4) shall n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xported between August, 2004 and March, 2005 and it was not clear as to when the inputs were received, so reference has been made to both the sets of rules. As already noticed, the provisions of both the rules are similar, except that under the Rules of 2002, exception contained in sub-rule (5) of Rule 6 was applicable only to the exempted goods, while under the Rules of 2002, exception applies to all excisable goods, irrespective of the fact whether they are exempted or subject to levy of duty. 13. Assistant Commissioner file, rejecting the claim of the respondent, held that since the finished leather exported by the respondent was exempt from duty, no bond or Letter of Undertaking was required to be furnished and the furnishing of bond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cleared for export under bond in terms of the provisions of Central Excise Rules, 2002. 17. Sub-rule (5) of Rule 6 of the Rules of 2002 was applicable only in case of exempted goods. That meant that the exception was not applicable in case of dutiable goods. It appears that this led to anomalous situations. For example, if the goods were dutiable and were exported, credit for CENVAT could not be claimed in respect of input of those goods, at least under the aforesaid exception clause. To overcome this kind of anomalous situations, exception clause contained in sub-rule (6) of Rule 6 of CENVAT Credit Rules, 2004 has been made applicable to all excisable goods. 18.Learned counsel for the appellant argued that term excisable goods used ..... X X X X Extracts X X X X X X X X Extracts X X X X
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