TaxTMI 
TaxTMI 
2013 (8) TMI 387
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....l excise duty. They acquired duty paid fiber for manufacture of spun yarn. The period of dispute in this case is from Feb 2007 to August, 2008. During the period prior to 1-2-2007 the appellant were availing of the exemption Notification No. 29/2004-C.E. as well as 30/2004-C.E. Under Notification No. 29/2004-C.E. a concessional rate of duty of 8% was required to be paid on the final products with the Cenvat Credit facility in respect of the inputs. Under Notification No. 30/2004-C.E., finished products were fully exempt from duty subject to condition that no input duty credit had been availed. During the period prior to 1-2-2007, the appellant were availing both the exemptions. 1.1 On 1-2-2007, Board issued a Circular No. 845/3/2007-CX.,....
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....the department, since the appellant have Rectilinear Worsted Combs, Combing Machines, blending recombing machinery and High Production Rectilinear Worsted Combs, which are useable for carding/combing of staple fibers, they do not satisfy the condition of not having the facility in the factory for producing the goods of Heading No. 5501, 5502, 5503 and 5504 of the Tariff. 1.2 On this basis, a show cause notice dated 5-2-2009 was issued to the appellant for - (a) recovery of allegedly short paid duty amounting to Rs. 3,56,99,537/- (including education cess) along with interest thereon under Section 11AB under proviso to Section 11A(1) of Central Excise Act, 1944; and (b) for imposition of penalty on the appellant under Section 11AC o....
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....cenvat credit in respect of the inputs used for the manufacture of the fully exempted final products, that as regards cenvat credit available in RG-23, Part-II account as on 31-1-2007, even if it is assumed that the same had been taken in respect of the inputs, which had been cleared by availing full duty exemption, since there is no dispute that the same had been subsequently reversed, it has to be treated as not availed at all, that the machinery in the appellant's factory is only for combing of fibres and not for producing the fibres while in terms of the condition of the notification for availment of full duty exemption under Notification No. 30/2004-C.E., the manufacturer should not have the machinery for producing synthetic filament y....
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....the cenvat credit availed inputs lying in stock as on 1-2-2007 and as such this plea of the department is totally incorrect. 6. We have considered the submissions from both the sides and perused the records. The dispute in this case is in respect of the goods cleared during the period from 1-2-2007 to August, 2008 by availing full duty exemption under Notification No. 30/2004-C.E. This exemption was available subject to two conditions - (a) No credit of duty paid on inputs used in the manufacture of final products has been availed, (b) The manufacturer does not have the facility in the factory (including plant and equipment) for the manufacture of synthetic filament yarn, synthetics, staple fibrer, synthetic filament tow and artifi....