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TMI Blog2017 (12) TMI 1308X X X X Extracts X X X X X X X X Extracts X X X X ..... it Rules, 2004 they are not entitled to avail Cenvat credit. 2. Heard the parties considered the submission. 3. I find that the said issue came up before the Hon'ble High Court Punjab & Haryana in the case of CCE vs. Happy Forging Ltd. - 2011 (265) E.L.T. 197 (P&H), wherein the facts of the case are as under :- "2. The assessee availed Cenvat credit as per Cenvat Credit Rules, 2004 (for short, "the Rules") in respect of inputs in manufacture on job work basis. The department raised an objection that the Cenvat credit was not permissible on inputs used in the manufacture of exempted goods in view of Rule 6(1) of the Rules. Accordingly, proceedings were initiated under Section 11A of the Act. Stand of the assessee was that under Notificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as already been accepted by the department as mentioned in this order-in- appeal. In addition to this, the Ld. Assistant Commissioner, Central Excise Division-I, Ludhiana has already in case of M/s Ludhiana Steel Rolling Mills, Ludhiana dropped the demand under similar set of circumstances vide order-in-original No. 75/CE/AC/LDH-1/05, dated 30-12-2005. In view of these judgments, the show cause notice does not stand and the same merits to be dropped." and the Hon'ble High Court observed as under :- "6. We are unable to accept the submissions. While there is no dispute that under Rule 6(1) of the Rules, Cenvat credit cannot be availed in respect of inputs used in manufacture of exempted goods, the same has to be read with the notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve, the notification itself clarifies that the inputs can be used within the factory of production or in any other factory of the same manufacturer. 10. Mr. Lakshmikumaran relied upon the decision of this Court in the case of CCE v. Hindustan Sanitaryware & Industries, (2002) 7 SCC 515, wherein in respect of this very notification, this Court has held that so long as duty is paid on the final product, the mere fact that duty was not paid on the intermediate product would not disentitle the manufacturer from the benefit of Notification No. 217/86-C.E., dated 2-4-1986. In that case, the input was plaster of Paris, the intermediate product was moulds made out of the plaster of Paris, the final product was sanitaryware. In our view, the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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