2006 (9) TMI 336

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....akhs on M/s. Mahindra and Mahindra by the Commissioner of Central Excise, Nagpur in the impugned order. 2. The brief facts of the case are that M/s. Agrofab were receiving inputs on job work basis from M/s. Mahindra and Mahindra under returnable delivery challan-cum-gate pass for manufacture of RAC assemblies which on return was to be used by M/s. Mahindra and Mahindra in the manufacture of tractors which were completely exempted from duty. The inputs were sent by M/s. Mahindra and Mahindra without availing credit on such inputs and the RAC assembly being manufactured by M/s. Agrofab was being cleared without pay- ment of duty under the provisions of Notification No. 214/86 though the documents like returnable gate pass, purchase or....

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....bsp; on which duty of excise is leviable in whole or in part; or (i)      for removal ---------- (ii)     for removal ------------ (iii)    by manufacturer of dutiable and exempted final products, after discharging his obligations in respect of said goods under rule 6 of the Cenvat Credit Rules, 2002; or (b)     cleared as such-------------------------- (i)      on payment of duty--------- (ii)     without payment of duty---------- (iia)   by a manufacturer of dutiable and exempted final products, after discharging his obligations in respect of said goods under rule 6 of the Cenvat Credi....

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....cleared by M/s. Mahindra and Mahindra and Education Cess has been treated as excise duty as per Clause 93 of Finance  (No.2) Act, 2004 and, therefore, in view of this they are covered by the provisions of clause (a)(i) of Notification No. 214/86. Thirdly, it was submitted that in any case if the duty is held to be payable they are entitled to Modvat credit available on the inputs used in the manufacture of RAC assemblies and such input credit comes to Rs. 2,72,50,546/- and the balance amount comes to Rs. 23,77,587/- which has already been paid by them. 5. The learned DR, however, submits that the applicants were not following procedure under Notification No. 214/86 and since M/s. Agrofab was not clearing both dutiable and exemp....