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TMI Blog2024 (12) TMI 735X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner of Central Excise, Chennai III confirming a demand of Rs.39,03,724/- towards Cenvat Credit payable under Rule 6(3)(i) of Cenvat Credit Rules, 2004 (CCR) during the period from April 2010 to March 2014 along with applicable interest and imposing penalty of 50% of the confirmed duty, under Section 11AC(1)(C) of the Central Excise Act, 1944 (ACT). The Appellant is engaged in the manufacture of Motor Vehicle Cabins and Cabin Parts. The Appellant has received advances from their customers for the manufacture of tools viz., Welding Fixtures & Tools for manufacture of Motor Vehicle Cabins. These tools which were manufactured were sold to their customers without payment of appropriate Central Excise duty. These tools sold to their customers w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Department failed to bring out such issues placing reliance on the following decisions: - a. SDL Auto Pvt. Ltd. Vs. CCE, Delhi [2013 (294) ELT 577 (Tri.-Del.)] b. CCE Vs. MTR Foods Limited [2012 (282) ELT 196] c. Garrison Polysacks Pvt. Ltd. Vs. Commissioner of Service Tax, Vadodara-II [2013 (292) ELT 513 (Tri.-Ahmd.)] d. Tata Engineering and Locomotive Co. Ltd. Vs. CCE, Pune [2005 (191) ELT 209 (Tri.-Mumbai)] ii. That the Appellant is not liable to pay duty under Rule 6(3)(i) of CCR as the said rule contemplated payment of duty only in respect of unconditionally exempted goods relying on the following decisions: - a. Shobha Developers Ltd. Vs. CCE, LTU, Bangalore [2012 (25) STR 136 (Tri.-Bang.)] b. Sterlite Industries (In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o erstwhile rule 57R(2), the new rules have no provisions barring the credit on capital goods used in the manufacture of exempt intermediate product. Simultaneously, the use of these capital goods in the overall manufacturing process of finished dutiable goods is not in dispute. 3. It is, therefore, clarified that Cenvat credit should not be denied on the capital goods used in manufacturing of intermediate goods exempt from payment of duty which are used captively in the manufacture of finished goods chargeable to duty. The Appellant has further relied on the following decisions on the issue of eligibility of Cenvat credit on inputs / input services utilised in the manufacture of Tool / Welding Fixtures: - a. TELCO Ltd. Vs. CCE, Pune [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al of the appeal filed by the Appellant. 6. Heard both sides and carefully considered the submissions and evidences on record. 7. The main issue that arises for consideration in this appeal is whether the appellant is liable for reversal of Cenvat credit on tooling fixtures under Rule 6(3)(i) of CCR for non-maintenance of separate records for dutiable/ exempted goods? 8. The main allegation of the Department is that the Tools / Welding fixtures sold to customers are exempted in terms of Notification No. 67/95-CE dated 16.03.1995 and as such, the Appellant is not eligible to avail Cenvat credit on inputs / input services used in the manufacture of tools/welding fixtures and hence in the absence of maintenance of separate accounts for duti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... production; (ii) goods specified in column (2) of the Table hereto annexed (hereinafter referred to as 'inputs') manufactured in a factory and used within the factory of production in or in relation to manufacture of final products specified in column (3) of the said Table; From the whole of the duty of excise leviable thereon which is specified in the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986)". 3.1 For the purpose of the proper appreciation of the case, the facts stated in show cause notice dated 29-9-2005 may be discussed. The appellant availed Cenvat credit in respect of inputs used in the manufacture of jig wires and jig rods. In the instant case, the appellant availed Cenvat credit on inputs used in the manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue has been settled by this Court in Collector of Central Excise v. Ballarpur Industries Ltd. - 1989 (43) E.L.T. 804 (S.C.) where the construction of a similar Notification was in question. This Court held that there were four kinds of inputs which could be said to be ingredients (i) those which retain their dominant individual identity and character throughout the process and also in the end-product, (ii) those which, as a result of interaction with other chemicals or ingredients, might themselves undergo chemical or qualitative changes and in such altered form find themselves in the end-product, (iii) those which like catalytic agents, while influencing and accelerating the chemical reactions themselves remain uninfluenced and unaltere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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