AI Drafter 
TaxTMI 
TaxTMI 
2024 (8) TMI 990
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....7.2004 which also co-existed with the former notification. They availed cenvat credit of duty paid on capital goods and service tax paid on input services and utilized the credit for payment of duty on finished products i.e. on export goods under claim of rebate of duty. They had not availed cenvat credit of duty on inputs. The appellant used common input services in the manufacture of dutiable as well as final products which were exempted (exported). They were paying an amount of credit attributable to input services used in or in relation to manufacture of exempted goods in terms of Rule 6 (3) (ii) of CENVAT Credit Rules 2004 read with Rule 6 (3A) of the said Rule. It was noted by the department that the amount so paid by the appellant wa....
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.... Ld. Counsel prayed that the appeal may be allowed. 6. The Ld. AR Shri. Harendra Singh Pal appeared for the department. The findings in the impugned order was retrieved. 7. Heard both sides. 8. On perusal of the impugned order, we find that the issue stands covered by the decision in the case of the appellant's sister concern, M/s. Sri Velayuthaswamy Spinning Mills (P) Ltd., (Unit. II) Vs. The Commissioner of GST & CE, Madurai vide Final order No. 40827/2019 dated 06.06.2019. The Tribunal after discussing the issue in detail has held that the demand alleging that the appellant has to pay amount after including the value of export clearances also was set aside. The relevant part of the decision reads as under: - 6.1 As ....
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.... of M/s. Drish Shoes Ltd. (supra), the Hon'ble High Court has analyzed the issue as to whether credit is eligible on the duty paid on inputs and input services used in the manufacture of exempted goods which are exported. The said question of law framed by the Hon'ble High Court is quoted as under : "(1) Whether an assessee exclusively manufacturing wholly exempted goods NIL tariff rate of duty) is eligible to avail CENVAT credit of duty paid on the said inputs and input services under Rule 6(1) of the CENVAT Credit Rules, 2002/CENVAT Credit Rules, 2004, used in the manufacture of such exempted goods, even if such goods are exported." After a detailed discussion, the Hon'ble High Court in paragraph 20 has answered the ques....
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....the fact that final product are otherwise exempted by provisions of Rule 6(6)(v) of the CENVAT Credit Rules, 2004 are applicable. Further, I find that in the case of Salzer Controls Ltd. - 2003 (160) E.L.T. 1169 and Paras Ship Breakers Ltd. this Tribunal has held that non-execution of bonds are only technical lapse. Further, in the case of Well Known Polyester Ltd. (supra) wherein the exempted goods were exported without bond or LUT by an assessee who was not even registered without bond or LUT by an assessee who was not even registered with the Central Excise department. This Tribunal has held that execution of bond/LUT was only procedural lapse for which refund could not be denied." The said decision in M/s. Jolly Board Ltd (supr....
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....t service avails of Cenvat credit in respect of any inputs or input serviced, and manufactures such final products or provides such output service which are chargeable to duty or tax as well as exempted goods or services, then, the manufacturer or provider of output service shall maintain separate accounts for receipt, consumption and inventory of input and input service meant for use in the manufacture of dutiable final products or in providing output service and the quantity of input meant for use in the manufacture of exempted goods or services and take Cenvat credit only on that quantity of input or input service which is intended for use in the manufacture of dutiable goods or in providing output service on which service tax is payable....
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....dering the language of Rule 6(6)(v) of the Cenvat Credit Rules, 2004 the petitioners are entitled to avail Cenvat credit in respect of the inputs used in the manufacture of the final products being exported irrespective of the fact that the final products are otherwise exempt." (Underline supplied) So far as the decision cited by the learned AR in the case of Suryamitra Exim Pvt. Ltd. v. CCE, Guntur reported in 2012 (283) E.L.T. 504, the export related to frozen shrimps and frozen fish which are attracting no duty or nil rate of duty and the exception provided in respect of export bond should be read in the context of liability to duty, which is the primary condition for the purpose of allowing Cenvat credit under the Cenvat Cre....