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2018 (2) TMI 807

nents, spares and accessories of capital goods, for the reason that the final products cleared by them are exempted from payment of duty - Held that: - identical issue decided in the case of The Commissioner of Central Excise Versus M/s. Same Duetz Fahr India (P) Ltd., Customs, Excise & Service Tax Appellate Tribunal [2017 (7) TMI 25 - MADRAS HIGH COURT], where it was held that India is a party to the WTO regime and, therefore, it is permissible for it to neutralise duties on inputs, whether in the form of goods or services - we see no difficulty in the Assessee's case falling in the exception carved out in Rule 6(6)(v) of the 2004 Rules. - Demand do not sustain - appeal allowed - decided in favor of appellant. - E/17/2011 - Final Order .....

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i R. Balagopal submitted that the department has denied the credit on capital goods alleging that the capital goods have been exclusively used for the manufacture of exempted goods and thus has contravened the provisions of Rule 6 (4), that Rule 6 (4) speaks about the exemption from duty of excise based upon area based clearance or value based clearance. The appellant was not availing exemption under area based clearance or value based clearance. Therefore, the allegation that the appellants were using capital goods exclusively used for the manufacture of exempted goods is incorrect. Further, the finished goods were exported/cleared under bond. Therefore, sub-rule 6 of Rule 6 would apply, which states that sub-rules 1,2,3 & 4 shall not .....

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xport under bond in terms of the provisions of the Central Excise Rules, 2002; The said position of law has been discussed by the Hon ble jurisdictional High Court in the case of Same Duetz Fahr India Pvt. Ltd. (supra), relied by the Ld. Consultant for the appellants. The relevant portion of the said judgment is reproduced as under:- 11.1 For the sake of convenience, the relevant extracts of Rule 6 are set forthwith hereafter: Rule 6. Obligation of manufacturer of dutiable and exempted goods and provider of taxable and exempted services. - (1) The CENVAT credit shall not be allowed on such quantity of input or input service which is used in the manufacture of exempted goods or for provision of exempted services, except in the circumstances .....

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nstant case, as indicated above, the assessee s goods were cleared for export, albeit under bond. 12.3 Therefore, the question, which arises is, would sub-rule (6) of Rule 6 of the 2004 Rules, would trump in the instant case, the provisions of sub-rule (1) of Rule 6. 13. It is no one s case that the goods manufactured by the assessee were not excisable. Though the goods were excisable, the only reason, that Central Excise duty was not paid or was not payable, was, on account of the provisions of the 2006 notification. Therefore, upon executing the bond, the assessee removed what were otherwise excisable goods without payment of duty. 13.1 One of the exceptions to sub-rule (1) of Rule 6 is a circumstance, where excisable goods are exported p .....

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