2025 (10) TMI 1260

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....l Excise Act, 1944. The following substantial question of law is admitted by order dated 08.07.2009: "Whether in the facts and circumstances of the case, the Tribunal is justified in allowing the appeal of the respondent in view of the Explanation to Rule 3 of Cenvat Credit Rules, 2004 and whether the credit availed of by the respondent under said Rules and the reversal thereof would amount to non-availment of cenvat credit of duty paid on the inputs within the meaning of condition stipulated vide Notification No. 30/2004-CE dated 9.7.2004?" 3. Brief facts giving rise to this appeal can be summarized as under: 3.1 The respondent is engaged in the manufacture of cotton fabrics, man made fabrics and made up articles falling und....

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....ry of Finance, Department of Revenue, issued the Circular No.795/28/2004-CX dated 28.07.2004 to clarify that Notification no.29/2004 prescribing optional duty at the rate of 4% for pure cotton goods and 8% for other goods, the Notification No. 30/2004 prescribing full exemption, are independent notifications and there is no restriction on availing both simultaneously. It was also clarified that the manufacturer should maintain separate books of accounts for availing the benefit under each notification. 3.6 On scrutiny of returns in Form ER-1 of the respondent for the period from July 2004 to February 2006, it was observed by the department that the respondent had started availing benefit of both the notifications. Therefore, by letter da....

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....ench in the case of M/s. Omkar Textiles & Others Vs. CCE&C, Ahmedabad vide order No. A/836 to 838/ WZB/Ah'bd/07 dt. 12/4/2007. For ready reference, we reproduce the para No.3 of the said order. "After hearing both sides duly represented by Shri Manish Bhall Shri Dhamal Shah, Shri Devan Parikh, Ld. Advocates and Shri Samir Chitkara, ld. SDT, we find that the law on the point stands declared by the Hon'ble Supreme Court in the case of Chandrapur Magnet (Wires) Pvt Ltd Vs. CCE, Nagpur [1195 (81) ELT (SC)]. It has been held that the reversal of credit of duty originally availed would amount to the effect as if no credit has been availed. In the light of the above decision, it has to be held that the credit availed and reversed would am....

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....ds only and then, he came to the conclusion that as the subjected two notifications refer to the aspect of credit being taken or otherwise of inputs, maintenance of separate accounts for inputs of prime importance. Since this condition was not satisfied, he confirmed the levy of duty, penalty, etc. This finding of the learned Commissioner of Central Excise is not in consonance with the observations made and the ratio laid down by the Honourable Supreme Court in the case of Chandrapur Magnet wires (P) Ltd (supra). 6. The findings rendered by the Honourable Supreme Court in the case of Chandrapur Magnet Wres (P) Ltd. (supra) are clearly applicable to the present matters. In that case also, the case of the Department was that reversal....

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....view that the claim for exemption of duty on the disputed goods cannot be denied on the plea that the assessee has taken the credit of the duty paid in the inputs used in manufacture of these goods. The rat laid down in this decision is squarely applicable to the facts of the present case and maintenance of separate books of accounts at the initial stage cannot be considered to be a condition precedent for claiming the benefit of exemption to the respondent assessed for the purpose of claiming the benefit of exemption to the respondent - assessee. 7. Even Rule 6(3) of the Cenvat Credit Rules, 2004 says that notwithstanding anything contained in sub-rules (1) and (2), the manufacturer or the provider of output service, opting not to....