2014 (2) TMI 868

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....acturer of knitted readymade garments. The appellant manufactures such garments not only for sale in DTA but also for export purposes. The appellant availed benefit of Notification No. 30/2004-C.E., dated 9-7-2004 in respect of readymade garments sold in the DTA which is subject to the condition that the appellant does not avail credit of the duty paid on "inputs" under the provisions of Cenvat Credit Rules. The appellant did not avail any credit of excise duty paid on inputs; however, the appellant availed Cenvat credit amounting to Rs. 39,951/- of the excise duty paid on capital goods, which were used in the manufacture of knitted garments both for domestic clearance as well as for export. The appellant also procured zippers and hangers f....

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....zippers which have been cleared into the domestic market on the ground that ineligible credit has been used for payment of duty thereon. The notice was adjudicated and the duty demand was confirmed along with interest and an equivalent amount of penalty was also imposed. Aggrieved of the same, the appellant preferred an appeal before the lower appellate authority who rejected the appeal and hence, the appellant is before us. 3. The ld. counsel for the appellant submits that the appellant manufactured knitted garments not only for the purpose of DTA clearance but also for the purposes of export. Goods which are exported are not "exempted" goods. As regards the goods cleared in the DTA, the appellant availed the benefit under Notificati....

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..... Accordingly, he pleads for grant of stay and allowing the appeal. 4. The ld. Additional Commissioner (AR) appearing for the Revenue points out that as per the proviso to Rule 6 of the said Rules, if the goods found to be defective or damaged or unsuitable or surplus to the needs of the manufacturer, he may return the said goods to the original manufacturer of the goods from whom he had obtained these and every such returned goods shall be added to the non-duty paid stock of the manufacturer of the subject goods and dealt with accordingly. In the present case, the appellant should have opted for the procedure under the proviso and should not have cleared the goods on payment of duty. Therefore, it is his contention that the payment o....