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TMI Blog2017 (5) TMI 1020X X X X Extracts X X X X X X X X Extracts X X X X ..... y for use in the manufacture of the excisable goods. However, during that period, according to the department, the appellant were not eligible for cenvat credit in respect of the above mentioned capital goods, as the capital goods received during the period from 2003-2004 till Feb., 2007 were exclusively in the manufacture of goods on job work basis, which were cleared without payment of duty under notification no.214/86-CE and hence the provisions of Rule 6(4) of Cenvat Credit Rules, 2004 would become applicable. 1.2 The above show cause notice was adjudicated by the Commissioner vide order-in-original dated 23-2-2012 by which the Commissioner held that the appellant were not eligible for above mentioned cenvat credit, as the capital good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admissibility of Cenvat credit under the Cenvat Credit Rules. Non fulfilment of condition of said Notification could result in denial of exemption and this has nothing to do with denial of Cenvat credit. The department itself has not raised demand of duty on the excisable goods manufactured by the appellant on job work basis, denying the benefit under the said notification and thereby admitting that the benefit is admissible to the appellant on the excisable goods manufactured on job work basis under Notification No.214/86-CE. The goods manufactured by the appellant on job work basis were indeed dutiable goods and not exempted goods as excise duty was finally paid thereon by the principal manufacturer. There is no allegation in the show ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) No Cenvat credit shall be allowed on capital goods which are used in the manufacture of exempted goods or in providing exempted services, other than the final products which are exempt from the whole of the duty of excise leviable thereon under any notification where exemption is granted based upon the value or quantity of clearances made in a financial year. 11. As per the said provisions, if the appellant is manufacturing the exempted goods, they are not entitled to take credit on the capital goods. It is admitted position in this case that the goods have cleared by the appellant on job work basis and such goods are dutiable or otherwise. The said goods job worked goods supplied to principal manufacture which have been cleared on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are exempted goods. In fact the said goods are dutiable. In that circumstance, also the credit cannot be denied to the appellant. 13. We further find that the similar issue came up before the Hon'ble Allahabad High Court in the case of Samsung India Electronics Limited (supra) wherein the Hon'ble High Court has framed the following issue: Whether the Cenvat credit of capital goods taken by the respondents, which are exclusively used in the manufacture of exempted goods, is admissible And after examining the issue, the Hon'ble High Court has observed as under: 7. Rule 2(b) of the Rules defines capital goods to mean goods which are used in the factory of the manufacturer of the final product. Rule 3 provides that a manufacturer or pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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