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of <h1>Denial of Cenvat Credit on Capital Goods for SSI Exemption Availing</h1> The appeal under Section 35-G of the Central Excise Act, 1944 was dismissed by the court. The manufacturing company, involved in cotton yarn production, ... Recovery of balance of cenvat credit at the time of surrender of registration certificate - credit in relation to the capital goods - manufacturing of cotton yarn - Enhancment in the exemption limit - Respondent surrendered registration - Held that:- registration was surrendered because of Notification No.47/2000 dated 1.9.2000 enhancing the exemption limit of SSI units to ₹ 1,00,00,000/- and was again obtained after withdrawal of the enhanced exemption and meanwhile respondent did not stop the manufacturing activities, we find no merit in the appeal and same is devoid of any merit - Decided in favour of Assessee. Issues involved:1. Appeal under Section 35-G of the Central Excise Act, 1944 against an order by the Customs, Excise and Services Tax Appellate Tribunal.2. Availing Cenvat Credit on capital goods by a manufacturing company.3. Surrendering and re-obtaining central excise registration by the company.4. Interpretation of Rule 3(1) and Rule 4 of CCR, 2002 regarding denial of Cenvat credit.5. Application of the judgment in the case of J.R. Herbal Care India Ltd. vs. Commissioner of Central Excise, Noida, 2010 (253) E.L.T. 321 (Tri. Del.) to the present case.Analysis:1. The appeal was filed under Section 35-G of the Central Excise Act, 1944 challenging an order passed by the Customs, Excise and Services Tax Appellate Tribunal. The respondent company, engaged in manufacturing cotton yarn, availed Cenvat Credit on capital goods amounting to Rs. 10,55,996/- during a specific period. The company surrendered its central excise registration due to an exemption limit increase for SSI units but later re-registered to avail the credit balance. Show-cause notices were issued, leading to the appeal.2. The Tribunal's decision in the case of J.R. Herbal Care India Ltd. vs. Commissioner of Central Excise, Noida, was cited, stating that a manufacturer availing SSI exemption does not lose the status of a manufacturer of excisable goods. Therefore, denial of Cenvat credit on capital goods for this reason is not justified. The appellant confirmed that the judgment in the J.R. Herbal case was not challenged by the department.3. Considering the facts presented, including the surrender and re-obtaining of registration due to changes in SSI exemption limits, and the uninterrupted manufacturing activities of the respondent company, the court found no merit in the appeal. The court dismissed the appeal, stating it was devoid of any merit based on the circumstances and legal interpretations provided.This detailed analysis covers the issues involved in the legal judgment, including the background, relevant laws, interpretations, and the final decision rendered by the court.
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