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Bhairav Synthetics Pvt. Ltd. Versus Commissioner of Central Excise, Thane

Benefit of cenvat credit - Simultaneous benefit of Notification No. 30/2004-CE and Notifications 29/2004 - Non maintenance of separate accounts - Held that:- Appellant can avail the benefit of both the Notifications i.e. 29/2004-CE and 30/2004-CE, at the relevant time of clearing the final product. It is also not in dispute that the appellant has been availing the cenvat credit only to the extent of 20% of the duty paid on various inputs and forgoing the credit to the extent of 80% based on thei .....

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Appellant's case is fully covered by the circular cited above. Moreover, the benefit of credit is sought to be denied on purely technical grounds. It is settled law that substantive benefit cannot be denied merely on technical grounds - impugned order is liable to be set aside - Decided in favour of assessee. - Appeal Nos. E/854 & 855/10-Mum - Dated:- 4-12-2015 - Hon ble Mr. S. S. Garg, Member (Judicial) For the Petitioner : Shri Nimesh Mehta, Advocate For the Respondent : Shri Ashutosh Nath, .....

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g is grey fabrics, which also falls under Chapter 54 and 55 of CETA. The appellant availed cenvat credit of duty paid on grey fabrics in terms of Rule 3 of Cenvat Credit Rules, 2004 and maintained prescribed records in respect of such availment and utilization of cenvat credit. The appellant processed grey fabrics on job work basis and also on its own. Vide Notification No. 29/2004-CE dated 9.7.2004, a concessional rate of duty has been prescribed for manmade textile fabrics falling under Chapte .....

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nt of duty and also on payment of duty. The appellant used to take cenvat credit on grey fabrics to the extent of 20% of the total duty paid and forgoing the credit to the extent of 80% and similar practice was followed in respect of other inputs like dyes, chemicals etc. and this practice was based upon the ratio of clearances of dutiable and exempted final products, which was approximately 20:80. A show cause notice was served on the appellant for wrong availment of cenvat credit amounting to .....

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ellant filed separate reply questioning the legality of the said allegations. Thereafter the adjudicating authority vide its order dated 30.8.2006 passed ex parte order confirming the entire demand towards cenvat credit raised in both the show cause notices by separate orders and also imposed a penalty of ₹ 20,000/- on the appellant. Thereafter the appellant filed separate appeals before the Commissioner (Appeals) who directed the appellant to deposit the entire amount of ₹ 6,93,083/ .....

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and thereafter the Commissioner (Appeals) heard both the appeals and rejected them by upholding the decision of the adjudicating authority. Now the appellant is before this Tribunal by filing these two appeals which are on identical facts. 3. The learned counsel for the appellant submitted that the impugned order upholding the demand towards cenvat credit is illegal, improper, liable to be set aside being unsustainable in law and also contrary to the relevant statutory provisions. He further su .....

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cenvat credit account and also reflected in the books of accounts and thereby the appellant has complied with the requirement of Rule 6(2) of the Cenvat Credit Rules, 2002 which provides for maintenance of separate accounts for receipt, consumption and inventory of inputs meant for use in the manufacture of dutiable final products and exempted products. He further submitted that the impugned order failed to explain as to which type of separate accounts are contemplated under Rule 6(2) which the .....

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2 is not only improper and unjustified but also illegal. He also submitted that the learned Commissioner (Appeals) in the impugned order has admitted that these instructions are binding on the Revenue but still failed to follow the same without any justified reason. The learned counsel further submitted that substantial benefit of cenvat credit cannot be denied on technical grounds when the appellant has admittedly forgone the benefit of credit on input for use in the manufacture of exempted goo .....

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the appellant can avail the benefit of both the Notifications i.e. 29/2004-CE and 30/2004-CE, at the relevant time of clearing the final product. It is also not in dispute that the appellant has been availing the cenvat credit only to the extent of 20% of the duty paid on various inputs and forgoing the credit to the extent of 80% based on their ratio of turnover of dutiable goods vis-vis the exempted goods. This position is reflected in their accounts also. The appellant has been maintaining th .....

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obtain dye and chemicals under invoice issued in his name, can take credit of duty paid on such dyes and chemicals to pay duty on his dutiable clearances, even though some of these inputs were used for making goods cleared without payment of duty under the job work scheme. 2. The purpose of the new rules is to allow the textile sector to carry on the?2. work as they have been doing all along, and not to disturb the trade practices. It would be sufficient if the manufacturers or the deemed manuf .....

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e impugned order, but he refused to follow the same without any justified reason. Moreover, the justification given by him for not following the Board s circular is not at all legally valid and tenable in law. The benefit of cenvat credit is sought to be denied for not maintaining separate records of inputs used in the manufacture of dutiable as well as exempted goods. It is a fact that the appellant has availed 20% of the cenvat credit and forgone 80% of it on the basis of pro rata use of input .....

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