2025 (7) TMI 67

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....4 of CENVAT Credit Rules, 2004, along with appropriate interest, and imposing penalty of like amount under rule 15 of CENVAT Credit Rules, 2004, questions the very foundation of the attempt to deny them credit taken on duties paid towards procurement of capital goods. The ostensible reason for disentitling them to credit of Rs.16,05,559, taken in 2015-16, 2016-17 and 2017-18 upto June 2017, was the alleged utilisation of the said capital goods in the manufacture and clearance of exempted goods which, according to lower authorities, is not permissible and should have been reversed in accordance with rule 6(4) of CENVAT Credit Rules, 2004. 2. Learned Counsel for appellant and Learned Authorised Representative made submissions at length. ....

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....eason the averment of the appellant does not have any force. Therefore, I am of the considered opinion that the appellant have taken the cenvat credit in their books of accounts in contravention of provisions of rule 6(4) of the cenvat credit rules, 2004 & recoverable from them.' 4. The primary claim made on behalf of the appellant is that the capital goods in question had been used for manufacture of goods other than exempted goods and, in support thereof, returns for the period were furnished. These were before the lower authorities and, yet, it was held in the impugned order that 'RULE 6. Obligation of a manufacturer or producer of final products and a provider of output service. - xxxxxx (4) No CENVAT credi....

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.... duty with exempted goods despite the clarity of intent in 'RULE 2. Definitions. - In these rules, unless the context otherwise requires, - xxxx (d) ―exempted goods means excisable goods which are exempt from the whole of the duty of excise leviable thereon, and includes goods which are chargeable to ―Nil rate of duty [[and] goods in respect of which the benefit of an exemption under Notification No. 1/2011-C.E., dated the 1st March, 2011 or under entries at serial numbers 67 and 128 of Notification No. 12/2012-C.E., dated the 17th March, 2012 is availed;' in rule 2 of CENVAT Credit Rules, 2004. The returns leave no room for doubt that goods have been exported and, consequently, rule 6(4) of CENVAT ....