TaxTMI 
TaxTMI 
2021 (8) TMI 799
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....ncial year. 2. The brief facts of the case are that the appellant is engaged in the manufacture of Cotton Yarn and woven fabrics classifiable under Chapter heading No. 52.07, 52.08 and 55.12 respectively of Central Excise Tariff Act, 1985. Officers visited the unit of the appellant on 03.06.2009 and recorded the statement of Shri Sanjeev Banerjee, authorized signatory. He said that the appellant has opted to avail the benefits of exemption from payment of duty in terms of Notification No. 30/2004-CE dated 09.07.2004 vide their letter dated 08.09.2004 intimating that they would not avail credit on inputs and input services as their finished goods would be cleared under Notification No. 30/2004 on nil payment of duty. The appellant did not avail the facility of Cenvat Credit on the duty paid on inputs and input services as they have opted for exemption from payment of duty on their finished goods. 3. The yarn manufactured by the appellant was chargeable to central excise duty @8% (tariff rate) in terms of Chapter 52 of Central Excise Tariff Act, 1985. Of the two exemption Notifications, one had provided for partial exemption for some period and full exemption for some period wh....
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....pellant is required to reverse the cenvat credit used on capital goods procured by them in contravention of Rule 6 (4) of Cenvat Credit Rules, 2004 read with Notification No. 58/2008-CE dated 07.12.2008. Therefore, a show cause notice was issued to the appellant for the period 01.02.2009 to 31.12.2009, to demand on account of denial of cenvat credit availed on capital goods. The adjudication took place and demand proposed in the show cause notice was confirmed alongwith interest and penalty was also imposed. Against the said order, the appellant is before us. 5. Learned Counsel for the appellant submits that the appellant is availing the benefit of both the notifications simultaneously i.e., Notification No. 29/2004-CE dated 09.07.2004 and 30/2004-CE dated 09.07.2004 i.e., they are paying duty @4% on some goods and are clearing some goods without payment of duty. The capital goods have been used in the manufacture of dutiable as well as exempted goods. 6. It is his submission that the law does not restrict the appellant to opt for a single notification for all its clearances; the appellant can choose any exemption notification which suits it for each type of clearances. The a....
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....hen the goods are exclusively used in manufacture of exempted goods. The term 'exclusive' means without any exception as held by this Tribunal in the case of Supreme Industries Ltd. Vs. CCE - 2002 (149) ELT 659 (Tri. -Mum.). It is his submission that the cenvat credit on capital goods cannot be denied where the capital goods are used to manufacture dutiable as well as exempted goods as in the case of appellant. 10. He further submitted that the revenue has alleged that the appellant has not maintained separate record while manufacturing dutiable and exempted goods. It is his submission that in terms of Rule 6(2) of the Cenvat Credit Rules, 2004, the separate records are required to be maintained only with regard to inputs and input services for appropriate and proportionate availment of cenvat credit on inputs used in dutiable goods. Whereas, it is not the case with regard to capital goods, the credit on capital goods can only be denied under Rule 6(4) when the capital goods are used exclusively in manufacture of exempted goods. He further submits that there is no mention with regard to any detail of machinery/capital goods and used thereof. 11. He further submits that the Le....
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....tenance of separate books of accounts for goods availing benefit of Notification No. 29/2004-CE and 30/2004-CE. As the appellant was not maintaining separate books of account, therefore, they are not entitled for benefit of the notification. Accordingly, the appellant has availed inadmissible cenvat credit on capital goods during the material period when as they were manufacturing exempted goods. He further submits that although for the subsequent period, cenvat credit was allowed on capital goods but the decision will not help to the appellant as in terms of Notification No. 30/2004-CE dated 09.07.2004, the goods are exempted fully. As the appellant has failed to bring on record the documentary evidence to support their claim that they have paid the duty, therefore, the impugned order is to be upheld. 13. Heard the parties and considered the submissions. 14. On careful consideration of the submission made by both sides, the appellant is a manufacturer of cotton yarn and woven fabrics of cotton. It is also fact that the appellant is entitled for benefit of Notification No. 29/2004-CE dated 09.07.2004 for their clearances at concessional rate of duty and Notification No. 30/20....
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....and they have become eligible for Notification No. 30/2004-C.E., they have no option but to avail of the exemption Notification 30/2004-C.E. only and they cannot opt from Notification No. 29/2004-C.E. and pay 4% the duty and in such a situation if any duty payment has been made, it would have to be treated as deposit and the clearances would have to be treated as clearances of fully exempted goods made under Notification No. 30/2004-C.E. and accordingly the appellant would not be eligible for capital goods Cenvat credit. This contention of the Department is totally incorrect, as Exemption Notification No. 29/2004-C.E. is an unconditional exemption which prescribes a rate of duty of 4% ad valorem. There is no condition in this notification that for availing of this exemption prescribing concessional rate of duty of 4% adv., input duty Cenvet credit must be availed. The condition of non-availment of input duty Cenvat credit is for nil duty under Notification No. 30/2004-C.E. But this does not mean that an assessee not availing input duty credit cannot avail the exemption under Notification No. 29/2004-C.E., as this is an unconditional Notification. When an assessee does not avail of ....
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....een available during that period. Once the duty became payable from 7.7.2009, the appellant was entitled to take credit on the capital goods used in the manufacture of the goods. No time limit has been prescribed for availing CENVAT credit on capital goods. As long as the capital goods in question were used in the manufacture of dutiable goods (post 7.7.2009), nothing stops the appellant from taking CENVAT credit even on the capital goods received earlier (up to 6.6.2009) but also used post 7.7.2009. 21. In these terms, we do not find any merit in the impugned order, the same is set-aside. 22. In result, the appeal is allowed with consequential relief, if any. (Pronounced on 10.08.2021) ============= Document 1 OHIGINAL FOR BUYER PANGE CE ONVISION III, SADA SHIV COMPLEX, DERABASSI : SADA SHIV COMPLEX, DERABASSI SSIONERATE: CHANDIGARH-11 1 AACCN 3563 AX M004 BOC NO : AACCN 3563 AX M004 PAN NO. : AACCN 3563 A LA NO. DATE VAT NO. : 03981086011 NAME OF EXCISEABLE COMMODITY: HEADING/SUB HEADING NO. Nahap INDUSTRIAL ENTERPRISES LTD 87-19 NAHAR COMPLEX, P.O. Dappar-140506 (Lalru), 21st Mile Stone, Ambala-Chandigarh Roa....