2006 (6) TMI 53

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....of duty paid on the inputs used in the manufacture of dutiable and non-dutiable Excisable goods and reversed subsequently. The assessee submits that any provision of 6(3)(vi) of Cenvat Credit Rules, 2002 exempts the manufacturers of textile products falling under Chapter 50-63 of the CET from maintaining separate books of accounts. They had applied the provision in letter and spirit of law by reversing the credit taken on the exempted goods and hence, they are eligible for the benefit of the Notifications. However, the Commissioner did not agree with their submissions and denied the benefit of the Notification and confirmed the demands. 2.The learned Counsel submits that the issue is covered by the ruling rendered by this bench in the ca....

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....ecision of the Apex Court in the case of Chandrapur Magnet Wires (F,) Ltd. v. CCE, Nagpur — 1996 (81) E.L.T. 3(S.C.) wherein it is held that, on reversal of Modvat Credit, the assessee cannot be said to have taken credit of duty on the inputs utilized in the manufacture of the exempted final products. Consequently, exemption from duty is not deniable to final product even if the exemption Notification stipulates a condition that exemption to final product is not available where Modvat credit under Rule 57A taken on inputs used in the manufacture of final products in question. In the above case, the Supreme Court has set aside the decision of the CEGAT denying the benefit of exemption notification. The learned Advocate pointed out that thi....