Cenvat credit may be used to pay duty on duty-free goods cleared without intended export manufacture

Goods procured duty free under Notification No. 43/2001-CE(NT) and later cleared without being used for the intended export manufacture were considered capable of attracting duty payment through Cenvat credit. The Tribunal treated the issue as covered by an earlier decision on the same notification and declined to accept the Revenue's factual distinction as material, because the controlling question remained the permissible mode of discharging duty on such goods. On that basis, the notification was read as not barring payment through Cenvat credit in the circumstances discussed, and utilisation of Cenvat credit was held permissible.

---

---

Issues: Whether excise duty on goods procured duty free under Notification No. 43/2001-CE(NT) and cleared without being used for the intended export manufacture could be paid by utilising Cenvat credit.

Analysis: The issue was treated as identical to an earlier Tribunal decision covering goods procured under the same notification, where payment of duty through Cenvat credit had been permitted. The factual distinction pointed out by the Revenue was not accepted as material, because the controlling question remained the mode of payment of duty on goods obtained under Notification No. 43/2001-CE(NT). Following the earlier view, the notification did not bar discharge of the duty liability through Cenvat credit in the circumstances of the case.

Conclusion: The issue was decided in favour of the assessee, and utilisation of Cenvat credit for payment of duty was held permissible.

---