2017 (4) TMI 218

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....pondent was manufacturer of Man Made Fabrics (MMF) falling under Chapter 54 and 55 of Central Excise Tariff Act, 1985. In the manufacture of excisable goods, the Respondent had used inputs viz., Dyes, Chemicals & Packing materials on which they had availed CENVAT Credit. The Respondent had availed benefit of exemption Notification No. 29/2004-CE and Notification No. 30/2004-CE both dated 09.07.2004, on the finished goods. Since, the Respondent  had failed to maintain separate records of the consumption of inputs in the manufacture of finished goods cleared availing simultaneous of benefit of both these Notifications, accordingly, a demand notice was issued to the Respondent for recovery of Rs. 13,53,912/- for the period July, 2004 to J....

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....s for the goods availing of the benefit of Notification No. 29 of 2004 and for the goods availing of the benefit of Notification No. 30 of 2004. He has further observed that the circular does not speak of final goods or inputs, but, it refers to the goods only and then, he came to the conclusion that as the subjected two notifications refer to the aspect of credit being taken or otherwise of inputs, maintenance of separate accounts for inputs is of prime importance. Since this condition was not satisfied, he confirmed the levy of duty, penalty, etc. This finding of the learned Commissioner of Central Excise is not in consonance with the observations made and the ratio laid down by the Honourable Supreme Court in the case of Chandrapur Magne....

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....t before removal of the exempted final product and hence, it cannot be said that the assessee has taken credit for the duty paid on the inputs utilised in the manufacture of the final exempted product under Rule 57A. The Court, therefore, took the view that the claim for exemption of duty on the disputed goods cannot be denied on the plea that the assessee has taken the credit of the duty paid in the inputs used in manufacture of these goods. The ratio laid down in this decision is squarely applicable to the facts of the present case and maintenance of separate books of accounts at the initial stage cannot be considered to be a condition precedent for the purpose of claiming the benefit of exemption to the respondent-assessee. 7.Even Rul....