TMI Blog2009 (3) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... of Cenvat credil can at best be held as procedural irregularity - E/2231/2005 - A/562-563/2009-WZB/AHD - Dated:- 17-3-2009 - Ms. Archana Wadhwa, Member (J) and Shri B.S.V. Murthy, Member (T) S/Shri V. Sridharan and S.J. Vyas, Advocates and Sandeep Sachdeva , C.A. , for the Appellant. Shri Sameer Chitkara, SDR, for the Respondent. [Order per : B.S.V. Murthy, Member (T)].- Appellants are composite textile mills engaged in the manufacture of Cotton Yarn, Cotton Fabrics, Knitted Fabrics and Garments and are availing Cenvat credit facility under the Cenvat Credit Rules, 2002. This appeal has been filed against the decision of Commissioner (Appeals) denying them Cenvat credit on knitted garments removed for export under bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the appellant before the Commissioner (Appeals) and he has already dealt with all the points and therefore, he reiterates the grounds given for denying the Cenvat credit to the appellant and imposition of penalties by the lower authorities. 4. We have considered the submissions made by both the sides. The issue involved is whether the appellant could have availed Cenvat credit in respect of exports alone, claimed the refund thereof and at the same time cleared the goods to the domestic market without availing Cenvat credit on the inputs and thereby availing full duty exemption in respect of domestic clearances. 5. Before proceeding further, the condition No. 4 attached to serial No. 14 of the Notification No. 15/2002, is reproduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this regard and we find that the following decisions support the case of the appellant; in Ganesh Metal Processors Industries [2003 (151) E.L.T. 21 (S.C.)], the Hon'ble Supreme Court held that if Modvat credit was availed, the question of exemption of goods under Notification No. 202/88-C.E. has not arise and exemption was not available. In Mardia Chemicals Ltd. [2006 (199) E.L.T. 110 (Tri.-Mum.)], it was held that if the appellant did not fulfil the condition of non-availment of credit, the consequence would be denial of benefits under Notification No. 203/92-Cus and demand for reversal of Cenvat credit cannot be sustained. Similar view was taken by the Tribunal in Steelco Gujarat Limited case [2000 (122) E.L.T. 381 (Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty under bond cannot be denied. In this connection the decision of the Bombay High Court in the case of Repro India Ltd. [2009 (235) E.L.T. 614 (Bom.) = 2008 (88) RLT 481 (Bom.)] has been cited and we find that this judgment is relevant. Once the goods are exported under bond even if they were not entitled to Cenvat credit, the duty paid on the inputs could have been claimed as a refund, therefore, whole exercise is Revenue neutral and availment of Cenvat credil can at best be held as procedural irregularity. We also find considerable force in the arguments advanced by the advocate that prior to 27-4-2002, appellants were entitled to avail exemption consignment wise since assessment was also made consignment wise. However, this is onl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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