TMI Blog2007 (11) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... December 2005-November, 2006, they paid duty at the effective rates prescribed under Notification No. 29/2004-C.E., dated 9-7-2004 and, in certain cases, availed full exemption from payment of duty under Notification No. 30/2004-C.E., dated 9-7-2004. When any yarn was cleared by availing full exemption, proportionate credit availed on inputs was expunged under Rule 6(3)(a) of the CENVAT Credit Rules, 2004. In a show-cause notice dated 5-1-2007, the department alleged that they were not entitled to follow the procedure under Rule 6(3)(a), which was applicable to a manufacturer who manufactured both dutiable and exempted final products. The department refused to recognise the goods cleared under Notification No. 30/2004-C.E. as exempted good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udicating authority did not accept this argument. That authority, by following the Board's Circular No. 845/03/2006/CX, dated 1-2-2007, held that the aforesaid condition attached to Notification No. 30/2004-C.E. was a pre-condition for availing the benefit of the Notification and that, as the appellants had availed CENVAT credit on the inputs used in or in relation to the manufacture of the yarns cleared under the Notification, they were not eligible for the exemption. On this basis, the Commissioner confirmed the above demand of duty with interest thereon against the assessee and imposed on them a penalty of Rs. 1,00,000/-. The present appeal is directed against the Commissioner's order. 2. After hearing both sides and considering thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption Notification was extended to the assessee. In view of the case law already discussed, we hold that the appellants are entitled to the benefit of Notification No. 30/2004-CE in respect of the goods in question. 3. Learned SDR has referred to the Hon'ble Supreme Court's decision in Novapan India Ltd. v. Collector of Central Excise and Customs, Hyderabad [1994 (73) E.L.T. 769 (S.C.)] and in Eagle Flask Industries Ltd. v. Commissioner of Central Excise, Pune [2004 (171) E.L.T. 296 (S.C.)] in support of his submission that any exemption Notification required to be strictly construed and that, in case of any doubt or ambiguity, the benefit must go to the Revenue. He has also relied on the Board's Circular dated 1-2- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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