2005 (11) TMI 310

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....Bhaghya Devi, SDR, for the Respondent. [Order]. -  The appellants were engaged in the manufacture of cotton yarn and cotton polyester blended yarn. During the period November 2001 to January 2002, they cleared 44,300 Kgs. of the blended yarn to M/s. National Handloom Development Corporation (NHDC) at 'nil' rate of duty in terms of Sl. No. 109 of the Table annexed to Notification No. 3/2....

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....bmitted that, during the period of dispute, they manufactured only cotton polyester blended yarn, which was a dutiable item. During that period they did not manufacture any other item which was unconditionally exempt from payment of duty or chargeable to 'nil' rate of duty. A part of the blended yarn production was cleared on payment of duty to various customers and the rest was supplied to NHDC w....

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....ns of Rule 6(1) of the Cenvat Credit Rules, 2001, I am inclined to agree with ld. SDR. This sub-rule reads thus:- "The Cenvat credit shall not be allowed on such quantity of inputs which is used in the manufacture of exempted goods, except in the circumstances mentioned in sub-rule (2)" According to the Explanation referred to by ld. SDR, 'exempted goods' meant excisable goods, which were ei....