2009 (1) TMI 515

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....y under Cenvat Credit Rules, 2002. One of the inputs used by them is art-paper and gum base paper, which are got converted into inlay cards and stickers/labels on job work basis for use in the manufacture of cassettes. Inlay cards as well as stickers are fully exempt from duty. The point of dispute is as to whether the Respondents are eligible for Cenvat credit of duty on the art-paper and gum base paper. Revenue issued a show cause notice denying Cenvat credit amounting to Rs. 3,41,812/- for the period from February, 2003 to December, 2003 invoking Rule 6 of the Cenvat Credit Rules. The Assistant Commissioner vide order-in-original dated 22-3-06 confirmed the Cenvat credit demand of Rs. 3,41,812/- along with interest and besides this impos....

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....e Court judgment in the case of Escorts Ltd. v. CCE, Delhi reported in 2004 (171) E.L.T. 145 (S.C.), wherein the Hon'ble Supreme Court held that even if the tractor parts made by one unit of M/s. Escorts Ltd. out of duty paid inputs are cleared to their another unit at nil rate of duty under exemption Notification No. 217/86-C.E. for use in the manufacture of tractors, which are cleared on payment of duty, the Cenvat credit of duty on the inputs used in the manufacture of tractor parts would be available. He pleaded that though this judgments is with regard to the provisions of Central Excise Rules, 1944 pertaining to Modvat credit as the same existed during the period prior to 2000, the ratio of this judgment is applicable to the present c....

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....mpt from the whole of the duty of excise leviable thereon or chargeable to nil rate of duty. Though, the relevant rules for the period of dispute in this case are Cenvat Credit Rules, 2002 and in these rules there is no provision analogous to Rule 57D(2) of the erstwhile Central Excise Rules, 1944, I find that as per para 3.9 of the CBEC's Excise Manual of Supplementary Instructions, Cenvat credit shall be admissible in respect of the amount of inputs contained in any of the waste refuse or bye-product and similarly Cenvat credit shall not be denied if the inputs are used in any intermediate product, even, if such intermediate is exempt from payment of duty and that the basic idea is that Cenvat credit is admissible so long as the inputs ar....