CENVAT credit on exported nil-rated goods upheld despite simultaneous exemption notifications under the statutory exceptions

Simultaneous availment of Notification Nos. 29/2004-CE and 30/2004-CE was treated as permissible where the goods were nil duty and exported. The Tribunal applied its earlier view that Rule 6(1) of the CENVAT Credit Rules, 2004 did not bar credit in such circumstances because the case fell within the statutory exceptions for nil-rated or exported goods under Rule 6(5) and Rule 6(6). On that basis, the demand based on alleged ineligibility to claim both notifications was held unsustainable, the impugned order was set aside, and the appeal succeeded.

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Issues: Whether the appellant was entitled to simultaneously avail the benefits of Notification No. 29/2004-CE and Notification No. 30/2004-CE, and whether Rule 6(1) of the CENVAT Credit Rules, 2004 barred such benefit in the facts of the case.

Analysis: The issue was treated as covered by the Tribunal's earlier decision on the same point. The applicable principle was that where the goods attracted nil duty and were exported, CENVAT credit was not deniable in view of the exception contained in Rule 6(5) and Rule 6(6) of the CENVAT Credit Rules, 2004. On that basis, Rule 6(1) was held inapplicable to the facts where the exemption notifications were availed simultaneously.

Conclusion: The appellant was entitled to the relief claimed, and the demand based on ineligibility to simultaneously avail the notifications was not sustainable.

Final Conclusion: The impugned order was set aside and the appeal succeeded.

Ratio Decidendi: Rule 6(1) of the CENVAT Credit Rules, 2004 does not deny credit where the goods are exported and the case falls within the statutory exception applicable to nil-rated goods.

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