TMI Blog2012 (4) TMI 501X X X X Extracts X X X X X X X X Extracts X X X X ..... s been taken under the provisions of the CENVAT Credit Rules, 2004’. Therefore, it is clarified that non-availment of credit on inputs is a precondition for availing exemption under this notification and if manufacturers avail input tax credit, they would be ineligible for exemption under this notification. Textile manufacturer/processors have to use common inputs, which are used in a continuous manner, and it may not be practically possible to segregate and store inputs like dyes and chemicals separately or maintain separate accounts. In such cases, in order to facilitate simultaneous availment of the two notifications, such manufacturers may be advised not to take credit initially and instead take only proportionate input credit on inp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... final products by claiming the benefit of Notification No. 29/2004-C.E. which provides partial exemption from payment of duty. Simultaneously, applicants have also availed the benefit of Notification No. 30/2004-C.E. providing exemption from payment of duty to their final products and applicants are not entitled to take credit in respect of the duty paid on inputs. The applicants were not availing credit in respect of the common inputs used in the goods manufactured and cleared under both the notifications as there was a Board Circular No. 795/28/2004-CX., dated 28-7-2004, which provides that in case the manufacturer is availing the benefit of above mentioned notification, the manufacturer to maintain separate records in respect of the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake credit immediately on receipt of the inputs there is no bar for taking credit subsequently. The contention is that as per the provisions of the Rule, the manufacturer is entitled to take credit immediately on receipt of the inputs without putting the same to use. In the absence of any time bar it cannot be said that applicant has wrongly taken credit. 6. The revenue submitted that the Board Circular dated 1-2-2007 is prospective in nature which prescribed the procedure to be followed by the manufacturer availing the benefit of both notifications and the same cannot be considered as retrospective in nature and as per the procedure laid down after the circular. The manufacturer was allowed to take credit proportionate to the input used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication No. 30/2004-C.E., dated 9-7-2004 states that nothing contained in this notification shall apply to the goods in respect of which the credit of duty on inputs has been taken under the provisions of the CENVAT Credit Rules, 2004 . Therefore, it is clarified that non-availment of credit on inputs is a precondition for availing exemption under this notification and if manufacturers avail input tax credit, they would be ineligible for exemption under this notification. Reversal of credit on a later date would not suffice to make them eligible for this exemption. However, it is seen that textile manufacturer/processors have to use common inputs, which are used in a continuous manner, and it may not be practically possible to segregate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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