2012 (4) TMI 501

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....t for the period April 2005 to October 2007. 3. The brief facts of the case are that applicants are engaged in the manufacture of yarn and manmade fabrics. During the period in dispute applicants were clearing their final products by claiming the benefit of Notification No. 29/2004-C.E. which provides partial exemption from payment of duty. Simultaneously, applicants have also availed the benefit of Notification No. 30/2004-C.E. providing exemption from payment of duty to their final products and applicants are not entitled to take credit in respect of the duty paid on inputs. The applicants were not availing credit in respect of the common inputs used in the goods manufactured and cleared under both the notifications as there was a....

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....ctive in nature. The applicant also submitted that there is no dispute regarding the quantum of credit availed. The applicant also submitted that as per the provisions of Rule 4 of CENVAT Credit Rules, the manufacturer is entitled to take credit immediately on receipt of the inputs there is no bar for taking credit subsequently. The contention is that as per the provisions of the Rule, the manufacturer is entitled to take credit immediately on receipt of the inputs without putting the same to use. In the absence of any time bar it cannot be said that applicant has wrongly taken credit. 6. The revenue submitted that the Board Circular dated 1-2-2007 is prospective in nature which prescribed the procedure to be followed by the manufac....

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....d Notification No. 30/2004-C.E. provided the procedure on the representations were  received from trade and industry for ready reference to the present paragraph of the Circular is reproduced below :- "The issue has been examined. It is seen that proviso to notification No. 30/2004-C.E., dated 9-7-2004 states that 'nothing contained in this notification shall apply to the goods in respect of which the credit of duty on inputs has been taken under the provisions of the CENVAT Credit Rules, 2004'. Therefore, it is clarified that non-availment of credit on inputs is a precondition for availing exemption under this notification and if manufacturers avail input tax credit, they would be ineligible for exemption under this notification. R....