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M/s. SEL Manufacturing Co. Ltd. Versus CCE Chandigarh

2016 (341) E.L.T. 308 (Tri. - Chan.) - Cenvat Credit on capital goods - use of capital goods in the manufacturing of exempted goods - The Department's contention is that once the appellant have not availed any input duty credit and they have become eligible for Notification No. 30/2004-C.E., they have no option but to avail of the exemption Notification 30/2004-C.E. only and they cannot opt from Notification No. 29/2004-C.E. and pay 4% the duty and in such a situation if any duty payment has bee .....

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d exclusively in the manufacture of exempted goods - cenvat credit not denied impugned order set aside appeal allowed - E/55771/2013 - Final Order No. 60784/2016 - Dated:- 28-6-2016 - Mr. Ashok Jindal, Member (Judicial) Present for the Appellant: Shri Naveen Bindal, Advocate Present for the Respondent: Shri Satyapal, AR ORDER The facts giving rise to the appeal are, in brief, as under:- 1.1 The appellant are manufacturers of Yarn. During period March, 2010, they received capital goods in res .....

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as being cleared on payment of duty at the rate of 4% adv. and was being exported under rebate claim. Notification No. 30/2004-C.E. provides for full duty exemption to the items specified thereunder subject to condition that no input duty credit is availed. This exemption was being availed in respect of clearances of yarn intended for domestic consumption. However during the period of dispute, the appellant had not taken any input duty credit, either in respect of goods cleared at nil rate of du .....

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No. 30/2004-C.E. but they still chose to pay duty under Notification No. 29/2004-C.E., the amount paid towards duty cannot be treated as duty but only a deposit and the goods have to be treated as the exempted goods cleared under Notification No. 30/2004-C.E. and since the capital goods, in question have been used exclusively for manufacture of exempted goods, in view of Rule 6(4) of Cenvat Credit Rules, 2004, no Cenvat credit would be admissibly in respect of these capital goods. On this basis .....

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en filed. 2. Heard both the sides. 3. Shri Naveen Bindal, Advocate, the Id. counsel for the appellant, pleaded that during the period of dispute, the appellant were availing of Notification No. 29/2004-C.E. under which the rate of duty is 4% adv., without any condition and also exemption Notification No. 30/2004-C.E. which provides for full duty exemption subject to non-availment of input duty credit, that the goods meant for export were cleared on payment of 4% adv. duty and the goods meant for .....

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t the goods cleared under Notification No. 29/2004-C.E. cannot be treated as exempted goods covered by Notification No. 30/2004C.E., that since the capital goods were not exclusively used for manufacture of exempted goods, the provision of Rule 6(4) of Cenvat Credit Rules, 2004 are not applicable and capital goods Cenvat credit cannot be denied, that the appellant have a strong case on merit, therefore it is prayed that the impugned orders be set aside. 4. Shri Satya Pal, learned departmental re .....

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ce made on payment of 4% duty under Notification No. 29/2004-C.E. are actually the clearance of exempted goods and it is the Notification No. 30/2004-C.E. which was applicable in respect of these clearances and the amount paid as duty cannot be treated as duty, as once an assessee is eligible for full duty exemption under an exemption Notification, there is no option for him to pay duty, that looked at from this angle, the capital goods, in question, have been exclusively used in or in relation .....

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dispute that during the period of dispute no input duty credit had been availed and only capital goods Cenvat credit had been availed in respect of which there is no prohibition in Notification No. 30/2004-C.E. Thus the appellant even in respect of clearances made under Notification No. 29/2004-C.E. also, had not availed input duty credit, though in respect of these clearances, they could have availed the input duty Cenvat credit. The point of dispute is as to when the appellant have not availe .....

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