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of <h1>CESTAT AHMEDABAD: Reversing credit complies with Rule 6(3) for exemption under Notification 30/2004-CE.</h1> <h3>Mohit Industries Limited and NJ Textile Industries Pvt Limited Versus Commissioner of Central Excise & ST, Surat (Vice-Versa)</h3> Mohit Industries Limited and NJ Textile Industries Pvt Limited Versus Commissioner of Central Excise & ST, Surat (Vice-Versa) - TMI Issues involved: Whether the appellant is entitled to exemption under Notification No. 30/2004-CE despite availing Cenvat credit on inputs and subsequently reversing 6% of the value of exempted goods in compliance with Rule 6(3) of Cenvat Credit Rules, 2004.Detailed Analysis:1. Issue of Entitlement to Exemption: The Adjudicating Authority denied the appellant's claim for exemption under Notification No. 30/2004-CE, stating that availing Cenvat credit on inputs contravened the notification's condition. The appellant argued that by reversing 6% of the value of exempted goods in compliance with Rule 6(3), the condition of the notification was satisfied. The Tribunal referred to sub-rule (3D) of Rule 6, which deems payment under Rule 6(3) as non-availment of credit for the purpose of an exemption notification. The Tribunal relied on previous decisions, including Vineet Polyfab Pvt. Limited, to support the appellant's position.2. Interpretation of Statutory Provisions: The Tribunal analyzed the statutory provisions, emphasizing that compliance with Rule 6(3) by reversing the credit amounted to non-availment of credit as per sub-rule (3D). The Tribunal cited the case of Spentex Industries Limited, where it was held that payment under Rule 6(3) made the assessee eligible for claiming exemption under Notification No. 30/2004-CE. The Tribunal highlighted the importance of sub-rule (3D) in meeting the conditions of the notification.3. Application of Precedent: The Tribunal applied the precedent set by previous decisions, such as Life Long Appliances Ltd., and emphasized the significance of sub-rule (3D) in determining eligibility for exemption. The Tribunal noted that the department had accepted the decision in Vineet Polyfab Pvt. Limited, further supporting the appellant's position. The Tribunal concluded that once the amount under Rule 6(3) was paid, the condition of the notification was deemed to be complied with.4. Decision and Outcome: Based on the above analysis and the precedent set by previous cases, the Tribunal ruled in favor of the appellant, setting aside the demand for denying exemption under Notification No. 30/2004-CE. Consequently, the penalty imposed on the appellant was also deemed unsustainable due to the lack of merit in the Revenue's appeal. The impugned orders were set aside, the assessee's appeal was allowed, and the Revenue's appeal was dismissed.This detailed analysis of the judgment highlights the legal interpretation of statutory provisions, application of precedent, and the ultimate decision reached by the Appellate Tribunal CESTAT AHMEDABAD in the case concerning entitlement to exemption under Notification No. 30/2004-CE.
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