2011 (4) TMI 327

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.... of Notification No. 214/86-C.E., dated 25-3-86 and they were not paying any duty. The contention of the Revenue is that Sub-Rule 4(6) of the Cenvat Credit Rules, 2004 states that no cenvat credit shall be allowed on capital goods which are used exclusively in the manufacture of exempted goods. They were not entitled to avail the input/capital goods credit as they have not made any duty paid clearance. The original adjudicating authority on adjudication disallowed the cenvat credit of Rs. 2,95,056/- and the penalty equal to the credit disallowed along with interest. The assessee appealed against this order and Commissioner (Appeals) set aside the Order-in-Original and allowed the appeal. 2. The contention of the Revenue was on a sim....

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....eported at 2007 (220) E.L.T. 481 (T)]. 3.  Sub-Rule 4(6) of Cenvat Credit Rules, 2004 reads as follows : "No CENVAT credit shall be allowed an capital goods which are used exclusively in the manufacture of exempted goods or in providing exempted services, other than the final products which are exempt from the whole of the duty of excise leviable thereon under any notification where exemption is granted based upon the value or quantity of clearances made in a financial year." 4. I find that in the instant case the assessee had manufactured goods on job work basis as per Notification No. 214/86. Explanation-1 of this notification explains that the expression "job work" means "processing or working upon of raw materials or ....

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....t decision in the case of Escort Ltd. referred supra, we are of the view that the Alpha Lavan is no longer good law." 5. The wording used in Rule 4(6) of the Cenvat Credit Rules, 2004 are "capital goods which are used exclusively in the manufacture of exempted goods. The usage of word exclusively in the rule is significant. The Tribunal in the case of Sanshu Industries v. CCE Aurangabad reported in 2007 (220) E.L.T. 481 (Tri. - Mumbai) has held as follows : "I do not agree with the above reasoning of the appellate Commissioner. The expression "exclusively" used in Rule 57R does not mean "mainly or substantially" in common English language. The use of the said expression means "solely and only". As such, the credit on the capital ....