TMI Blog2015 (10) TMI 2348X X X X Extracts X X X X X X X X Extracts X X X X ..... ls) has admitted that no tax was payable when the tractor was cleared in the DTA for testing purpose and the same could have been done by adopting the process of Rule 4(5)(a) of the Cenvat Credit Rules. Accordingly, even when the tax is paid under mistake by way of reversal of CENVAT Credit, the same becomes refundable on the subsequent export of the goods by the assessee. Hence, in view of the fact that the same tractors were admittedly brought back in the factory of the appellant and after testing etc. were cleared for export under Bond and by virtue of Rule 6(6)(v) of Cenvat Credit Rules the provisions of sub-rule (i), (ii), (iii) & (iv) of Rule 6 are inapplicable. Accordingly, the amounted deposited become refundable - Impugned order is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reported to their jurisdictional Range Superintendent. These tractors were subsequently exported under Bond. Thereafter, the appellants filed refund claims of ₹ 63,050/- and ₹ 79,413/- respectively (the duty paid at the time of clearance in DTA for testing). The original adjudicating authority rejected the refund claims on the grounds that the appellants were not eligible for availing CENVAT Credit for inputs used in the final product in terms of Rule 6(1) of the Cenvat Credit Rules. Therefore, the provisions of Rule 6(3)(b) of the Cenvat Credit Rules, 2004 would not apply. 2.1 Being aggrieved, the appellant have preferred the appeal before the Commissioner (Appeals), who was pleased to reject the appeal observing as follows: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver testing activities. The reversal of CENVAT Credit was not warranted on tractors cleared for testing, as credit was not available on inputs used in tractors in terms of Rule 6(1) of the Cenvat Credit Rules. Therefore, question of cash refund would not arise. 2.2 Being aggrieved, the appellant is before this Tribunal. 3. Heard Mr. Ravi L. Ramanan, Sr. GM of the appellant and Mr. Sanjay Hasija, Supdt. (AR) for the Revenue. 4. Mr. Ramanan explained that the appellant was manufacturing both taxable and tax-free products. Some common inputs are utilized both in production of the exempted product and taxable products. The appellant also received some duty paid inputs which are exclusively used in the manufacture of exempted products ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed in production of exempted goods. This Tribunal held that denial of Modvat credit as well as levy of 8% on the finished exempted product is not permissible under law. As the assessee has paid 8% of the price of exempted goods at the time of clearance, accordingly, Revenue cannot demand the reversal of Modvat credit. The said ruling has also been followed in the case of Hetero Labs Ltd. Vs. Commissioner of Central Excise, Hyderabad 2005 (192) ELT 716 (Tri-Bang), wherein the question before the Tribunal was whether the appellant can avail Modvat credit when they have already paid 8% of the price in terms of the then Rule 57CC(1) on the exempted final product, it was held that CENVAT Credit could not be denied on exempted goods. 5. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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