2019 (11) TMI 292

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....n 30/2004-CE dated 09/07/2004. From August, 2016 they started paying duty by opting for the concessional exemption notification 29/2004-CE dated 09/07/2004. The case of the department is that at the time of receipt and installation of machines, the appellant was availing exemption notification no. 30/2004-CE. As per Rule 6 (4) of the Cenvat Credit Rules, 2004 if the capital goods is used exclusively for manufacture of exempted goods, the Cenvat Credit is not admissible. The contention of the department is that since at the time of receipt of capital goods, the appellant was manufacturing exclusively exempted goods with the help of the said warping machine, they are barred from availing the Cenvat Credit on such capital goods. 2. Shri Muk....

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.... 13/16-CE (N.T.) dated 01/03/2016. As per the substituted Rule, the bar on allowing the credit on receipt of capital goods is only on the condition and if the capital good is used for manufacture of exclusively exempted goods for a period of two years. He submits that as per the facts of the present case, though the capital goods was received in November 2014, but from August, 2016 they started manufacturing the dutiable goods which were cleared under notification no. 29/2004-CE. Therefore, the said capital goods was not used continuously for two years for manufacture of exempted goods. Therefore, the bar provided under Rule 6 (4) of Cenvat Credit Rules is not applicable in their case. 3. Shri S.N. Gohil, Ld. Supdt. (AR) appearing on beh....

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.... installation of such capital goods.". (h) in sub-rule (7), after the words "when a service is exported", the words "or when a service is provided or agreed to be provided by way of transportation of goods by a vessel from customs station of clearance in India to a place outside India" shall be inserted with effect from 1st March, 2016." As per the above substituted Rule, it is clear that the bar on availing the credit in respect of capital goods used in manufacture of exempted goods shall apply only if the capital goods are used for two years from the date of installation/commencement of production. As per the facts of the present case, though the appellant received and installed the capital good in their running unit in Novemb....