TaxTMI 
TaxTMI 
2026 (5) TMI 919
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.... Notification No. 30/2004 - CE dated 09.07.2004. 2.1. During the course of audit of accounts of the appellant, it was found that the appellant had availed ineligible Cenvat credit of Rs. 1,94,14,921/- on inputs and capital goods by wrongly interpreting the provisions of the notification no. 30/2004. It was found that the appellant has cleared the finished goods under Notification No. 30/2004-CE dated 09.07.2004 which provides for the exemption from the whole of the duty of excise leviable thereon, subject to specific condition which required non-availment of credit on inputs used in the manufacture of finished goods. As the appellant had cleared the finished goods under Notification No. 30/2004- CE dated 09.07.2004, it was alleged that the appellant was not eligible for the Cenvat credit availed by them on the inputs and capital goods. 2.2. On the basis of the said allegation, a Show Cause Notice dated 02.05.2016 was issued to the appellant proposing to recover the ineligible Cenvat credit of Rs. 1,94,14,921/- [Input - Rs. 43,05,307/- + Capital Goods - Rs. 1,51,09,614/-], availed by the appellant by wrongly interpreting the provisions of Notfn No. 30/2004 - CE dated 09.07.04 ....
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.... has been upheld by the Hon'ble Punjab and Haryana High Court as reported in 2011 SCC OnLine P&H 41. The appellant also relied upon the decision of the Tribunal in the case of Winsome Yarns Ltd. vs. CCE - 2015 SCC OnLine CESTAT 3769, wherein it has been held that the Cenvat credit availed on the capital goods cannot be treated as having been used exclusively in the manufacture of exempted goods when the appellant was clearing the goods by availing full duty exemption as well as on payment of duty. 3.4. The appellant further contends that the extended period of limitation cannot be invoked in this case for issuing the SCN, as they have not suppressed any information from the Department; they have been filing the EWR-1 returns regularly and disclosed the Cenvat credit availed details in the returns. Further, the issue involved in this case is of interpretative in nature and hence it is their contention that the demands confirmed by invoking the extended period of limitation is not sustainable. 4. The Ld. Authorized Representative of the Revenue submits that the appellant had intentionally cleared the goods on payment of duty by availing the concessional rate of duty as provided....
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....xcise & Customs, New Delhi Subject : Simultaneous availment of Notification No. 30/2004-C.E. & 29/2004-C.E. both dated 9-7-2004 by the manufacturers of goods falling under Chapter 50 to 63 of the CETA, 1985 - Regarding Representations were received from trade and industry, as well as field formations seeking clarification on the above referred subject. Notification No. 29/2004-C.E., dated 9-7-2004 permits clearance of goods at concessional rates availing CENVAT Credit wherein a manufacturer can take CENVAT Credit on inputs. Notification No. 30/2004-C.E., dated 9-7-2004 permits a manufacturer to clear the goods at 'Nil' rate of duty without availing CENVAT Credit on inputs. Further, Board's Circular No. 795/28/2004-CX, dated 28-7-2004 [2004 (170) E.L.T. T13] issued by TRU had clarified that the benefit of these two notifications can be availed simultaneously provided the manufacturer maintains separate Books of Account for goods in respect of which benefit of Notification No. 29/2004-C.E., dated 9-7-2004 is availed and similarly, for goods in respect of which benefit of Notification No. 30/2004-C.E., dated 9-7-2004 is availed. However, it was brought to the notice ....
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....them. We find that the inputs and capital goods have been utilized for the manufacture of both dutiable and exempted goods and hence we hold that the Cenvat credit availed by the appellant cannot be denied on the ground that the capital goods have been used for the manufacture of exempted goods. 6.3. We find that the above said view has been taken by the Tribunal, New Delhi, in the case of S. T. Cottex Export (P) Ltd. vs. CCE - 2010 SCC OnLine CESTAT 4390=2010 (261) E.L.T. 807 (Tri. - Del), wherein on identical facts and circumstances, this Tribunal has held that Cenvat credit cannot be denied when the assessee is simultaneously availing the benefit of Notfn 29/2004 - CE and Notfn 30/2004 - CE. The relevant part of the said decision is reproduced below for ready reference: "4. I have carefully considered the submissions from both sides and perused the records. Capital goods, in question, had been received during January, 2005 to March, 2005 and at that time the goods manufactured by using those capital goods - cotton yarn had been cleared by a duty exemption under Notification No. 30/2004-C.E. However, from June, 2005 onward the appellants started availing benefit of No....
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....l as on payment of duty. The relevant part of the said decision is reproduced below for ready reference: "6. There is no dispute that during period of dispute, the clearances for domestic consumption had been made by the appellant at nil rate of duty by availing the Notification No. 30/2004-C.E. and clearances for export had been made on payment of 4% duty under Notification No. 29/2004-C.E. There is also no dispute that during the period of dispute no input duty credit had been availed and only capital goods Cenvat credit had been availed in respect of which there is no prohibition in Notification No. 30/2004-C.E. Thus the appellant even in respect of clearances made under Notification No. 29/2004-C.E. also, had not availed input duty credit, though in respect of these clearances, they could have availed the input duty Cenvat credit. The point of dispute is as to when the appellants have not availed input duty credit, whether they have option to avail the Notification No. 29/2004-C.E. where the rate of duty is 4%. The Department's contention is that once the appellant have not availed any input duty credit and they have become eligible for Notification No. 30/2004-C.E., t....
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....on to evade the payment of tax cannot be alleged on an issue which is interpretative in nature. Further, it is on record that the Notice has been issued on the basis of the observations made by the audit on the records of the appellant. We find that the appellant has been filing returns regularly and they have disclosed the availment of Cenvat credit on the inputs and capital goods in the ER-1 returns filed by them. 7.1. Further, we find that the appellant has been claiming the rebate of the accumulated Cenvat credit after the export. From the rebate Sanction Orders, we find that the Cenvat credit availed by the appellant have been scrutinized by the Range Officer before sanction the rebate claims. For ready reference, the findings in one of the rebate sanction order in 49/Rebate/AC/RD/2011 dated 16.08.2011, is reproduced below: I have gone through the documents submitted by the party viz. original and duplicate copies of ARE-1 No. 013/UL (DTA Unit)/2011-12 dated 30.05.2011 duly certified by the Customs Officer regarding shipment of the export goods, copy of Export Invoice No. 5D11014 dated 30.05.2011, triplicate copy of ARE-1 forwarded by the Jurisdictional Range Offic....