TaxTMI 
TaxTMI 
2025 (1) TMI 1092
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.... penalty under Rule 15(2) of CCR read with Section 11AC of the Act. 2. Briefly stated, facts are that the appellant, a manufacturer of 100% cotton yarn, during the period 2009-10 to 2011-12, cleared the goods on payment of duty under notification No.29/2004 CE dated 09.07.2004 as amended, for export claiming rebate and simultaneously availed exemption under notification No.30/2004-CE dated 09.07.2004 for the export of 100% cotton yarn and also for domestic clearances. 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 of the said goods under claim of rebate of duty. They did not avail cenvat credit 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 the manufacture of exempted goods in terms of Rule 6(3) (ii) of CCR read with Rule 6(3A) of the rules ibid. For arriving at the amount of cenvat credit for reversal in terms of Rule 6(3A) of CCR, in so far as a manufacturer of....
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....not be sustained and the impugned orders were set aside with consequential relief. It is his submission that when the demand itself is unsustainable, the question of interest and penalty does not arise. He further submits that there is no element of wilful suppression of facts or misdeclaration and the issue is entirely interpretational and the demand raised invoking the extended period is not sustainable. 4. Ld. Authorised Representative Shri. M. Selvakumar represented the department and reiterated the reasons and resultant findings as recorded by the lower authorities. 5. Heard both sides, perused the appeal records and case laws submitted and relied on. On perusal of the impugned order in appeal as well as the case laws submitted, this Tribunal finds that a division bench of this Tribunal, in the case of Sivaraj Spinning Mills Pvt Ltd v. Commissioner of GST & Central Excise, Madurai, 2024 (8) TMI 990 CESTAT Chennai, in a similar fact situation of the appellant therein clearing cotton yarn on payment of duty under Notification No. 29/2004-CE dated 09.07.2004 and clearing cotton yarn at nil rate as per Notification No. 30/2004 - CE dated 09.07.2004, simultaneously, after dis....
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....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 question as under : "20. In view of the above discussion, we hold that an assessee, manufacturing goods chargeable to nil duty, is eligible to avail CENVAT credit paid on the inputs under the exception clause to Rule 6(1), as contained in Rule 6(5) of CENVAT Credit Rules, 2002 and Rule 6(6) of CENVAT Credit Rules, 2004, used in the manufacture of such goods, if the goods are exported. Question No. 1 is answered accordingly." Thus, it was held that even if the exempted goods are exported, credit is eligible. 6.3.2 Now, the question is whether the amendment brought forth to do away with the requirement to execute a bond while exporting exempted goods would change the situation. The....
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....cation 30/2004. The case of the appellant is that they are a 100% EOU and they are exporting most of their product and they have claimed the benefit of Notification 30/2004. The department has denied them Cenvat credit availed in view of the provisions of Rules 6(1) and 6(2) of the Cenvat Credit Rules, 2004, which are reproduced hereunder :- "(1) The Cenvat credit shall not be allowed on such quantity of input or input service which is used in the manufacture of exempted goods or for provision of exempted services, except in the circumstances mentioned in sub-rule (2). (2) Where a manufacturer or provider of output 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 tak....