Rule 6 exclusion for goods under exemption notification supports prima facie relief and waiver of pre-deposit.

Goods cleared without payment of duty under Notification No. 6/2006-CE fell within the Rule 6(6) exclusion in the CENVAT Credit Rules, so the obligations in Rule 6(1) to Rule 6(4), including separate accounts for exempted goods, did not apply. On the available record, no breach of Rule 6 was shown, and the assessee was therefore not prima facie in violation of condition (vii) of Notification No. 67/95-CE. The exemption could not be denied at the stay stage, and pre-deposit was waived with recovery stayed during pendency of the appeals.

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Issues: Whether, for goods cleared without payment of duty under Notification No. 6/2006-CE, the restrictions under Rule 6 of the CENVAT Credit Rules applied so as to deny the assessee the benefit of Notification No. 67/95-CE and justify insistence on pre-deposit.

Analysis: The clearance of goods under Notification No. 6/2006-CE attracted the exclusion in Rule 6(6) of the CENVAT Credit Rules, with the result that the requirements under Rule 6(1) to Rule 6(4), including maintenance of separate accounts for exempted goods, did not arise. On the available record, no failure to comply with any obligation under Rule 6 was shown. In that prima facie view, the assessee was not in violation of condition (vii) of Notification No. 67/95-CE and the exemption could not be denied at the stay stage.

Conclusion: The issue was decided in favour of the assessee, and pre-deposit of the dues was waived with recovery stayed during pendency of the appeals.

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