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M/s. Uttam Sugar Mills Ltd., Shri Ranjan Adlakha Versus C.C.E. Meerut-I

2017 (11) TMI 752 - CESTAT NEW DELHI

CENVAT credit - area based exemption - denial on the ground that the capital goods have been exclusively used for the manufacture of exempted goods - Held that: - appellant has enjoyed w.e.f. 03.12.2004 the benefit of area based exemption under notification no.49/03 & 50/03 dated 10.06.2003. Prior to that, the capital goods were installed and utilize, when the appellant was paying the duty and not availing the benefit of the area based exemption - Identical issue has come up before this Tribunal .....

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nt Ms. Rinky Arora, Advocate for the appellant Present Shri H.C. Saini, DR for the respondent ORDER Per: (Dr.) Satish Chandra The present appeal is filed against the Order-in-Original No.62/2005 dated 30.12.2005. The period of dispute is 02.03.2004 to 02.12.2004. 2. The brief facts of the case are that the appellant is engaged in the manufacture of Vacuum Pan Sugar and Molasses under chapter 17. During the impugned period, the appellant purchased certain capital goods for efficiency programme an .....

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the appellant filed the present appeal. 3. With the above background, we have heard Ms. Rinky Arora, Advocate for the appellant and Shri H.C. Saini, DR for the respondent. 4. In the instant case, appellant has enjoyed w.e.f. 03.12.2004 the benefit of area based exemption under notification no.49/03 & 50/03 dated 10.06.2003. Prior to that, the capital goods were installed and utilize, when the appellant was paying the duty and not availing the benefit of the area based exemption. Identical i .....

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n capital goods is allowable during the said period. The fact that from a subsequent date i.e. 07.08.2003 the Appellants opted for and started availing area base exemption will not disentitle them to the Cenvat Credit already availed. We find support for this view in the decision of the Larger Bench of this Tribunal in the case of Commissioner of Central Excise, Rajkot Vs Ashok Iron & Steel Fabricators, 2002 (140) ELT 277 (Tri.-LB), wherein the Tribunal has held that : 6. Before the Supreme .....

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maintained for Modvat purposes was only a book entry which might be utilised later for payment of excise duty on the excisable product. In other words, it matured when the excisable product was removed from the factory and the stage for payment of excise duty thereon was reached. This argument did not find favour with the Apex Court. The nature of the credit for excise duty paid on raw material was explained in the following manner:- It is clear from these Rules, as we read them, that a manufact .....

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t it stands cancelled or, if utilised, has to be paid for. We are here really concerned with credit that has been validly taken, and its benefit is available to the manufacturer without any limitation in time or otherwise unless the manufacturer itself chooses not to use the raw material in its excisable product. The credit is, therefore, indefeasible. It should also be noted that there is no co-relation of the raw material and the final product; that is to say, it is not as if credit can be tak .....

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