2019 (1) TMI 423

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.... Nil rate of duty, with the condition that manufacturer should not avail cenvat credit on inputs. The Notification No.29/2004-CE was amended as follows: (i) Vide Notfn No.58/2008 CE dt. 07.12.2008 - cotton yarn not containing any other textile material was wholly exempted from payment of duty. (ii) Vide Notfn No.11/2009- CE dated 07.07.2009 - restored the position as it stood before the change brought about by (i) above. Department took the view that cotton yarn was therefore absolutely exempted during the period from 07.12.2008 to 06.07.2009, and the assessees were prohibited from paying duty on their own and hence the assessees were not entitled for Cenvat Credit during this period; that further the assessees cannot avail Cenvat Credit....

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....l Excise Act, 1944. Thus the assessee was prohibited from paying duty on their own for the said wholly exempted goods and cannot opt to pay duty under Notification No.59/2008-Central Excise dated 7.12.2008. Consequently, they cannot take Cenvat credit on wholly exempted products in terms of Rule 6 (4) of the Cenvat Credit Rules, 2004 during the period 7.12.2008 to 6.7.2009. (ii) Further, the assessee themselves reversed the ineligible credit on their own on 27.01.2010 and thus admitting their ineligibility to avail the credit during the disputed period. (iii) When the final product is fully exempted on the date of taking / availing credit, the assessee cannot take Cenvat credit on capital goods. The purpose of taking credit is to meet the....

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.... in respect of availing of capital goods credit has to be noted for deciding this issue. a) In terms of Rule 3, a manufacturer of final products can be taken credit of entire duty paid on capital goods received in their factory of final product. b) In terms of Rule 4, the Cenvat credit in respect of capital goods received in a factory at any point of time in a given financial year can be taken only for an amount not exceeding fifty per cent of the duty paid on such capital goods in the same financial year and the balance amount of CENVAT credit may be taken in any financial year subsequent to the financial year in which the capital goods were received in the factory of the manufacturer. c) As per sub-rule 6 (4) of CCR, no Cenvat credit s....