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TMI Blog2018 (9) TMI 817X X X X Extracts X X X X X X X X Extracts X X X X ..... ging duty liability on the finished goods i.e., Cotton Knitted Fabrics under Notification No. 29/2004 and also claiming exemption under Notification No. 30/2004 which would in turn mean that they had informed the authorities they intended to use the machines on which CENVAT credit on capital goods were availed for manufacturing of dutiable goods as well as exempted goods - credit remains allowed following the decision of S.T. Cottex Exports Pvt. Ltd. - penalty also set aside. Appeal allowed - decided in favor of appellant. - Appeal No. E/2498/2010 - A/31043/2018 - Dated:- 6-8-2018 - Mr. M.V. RAVINDRAN, MEMBER (JUDICIAL) And Mr. P. VENKATA SUBBA RAO, MEMBER (TECHNICAL) Shri Joseph Dominic, Consultant for the Appellant. Shri Dass Thavanam, Superintendent (AR) for the Respondent. ORDER [Order per: M.V. Ravindran] This appeal is directed against Order-in-Original No. 03/2010 (C.E.) dated 26.08.2010. 2. Heard both sides and perused the records. 3. On perusal of records, it transpires that the issue is regarding availment of CENVAT credit of the Central Excise duty paid on capital goods during the period March, 2006 to September, 2008 is correct or ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that the decision of the S.T. Cottex Exports Pvt. Ltd., was taken in appeal by the Revenue before the Hon ble High Court of Punjab Haryana upheld the order of the Tribunal by dismissing the appeal filed by the Revenue as reported at [2011 (268) ELT 318]. 6. Learned Departmental Representative on the other hand submits that the decision of the Tribunal in the case of Surya Roshni Ltd., which has been upheld by the Apex Court settles the law, as to CENVAT credit cannot be availed on the capital goods which are used exclusively for manufacturing of exempted goods. It is his further submission that in the case of Brindavan Beverages Pvt. Ltd., [2008 (232) ELT 475] wherein, the issue of capital goods CENVAT credit availed on the machines which are used for manufacturing of exempted goods was considered and it was held that said CENVAT credit availment was incorrect and was not permissible. 7. On careful consideration of submissions made by both sides, we find that the lower authorities in the impugned order have accepted the fact that the CENVAT credit availed on inputs and input services by the appellant during the period in question has been reversed. To that extent, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 75,798/-. The adjudicating authority after issuance of notice confirmed the demand of duty on the ground that since the final goods were exempted, the cenvat credit was not admissible in view of Rule 6(4) of the Cenvat Credit Rules, 2005. The order-in-original was upheld by the Appellate Authority. On further appeal by the assessee, the Tribunal set aside the same, holding that it was not a case of availing of cenvat credit in respect of capital goods used in manufacture of exempted goods as by virtue of Notification No. 29/2004- C.E., dated 9-7-2004, 4% duty was payable on the manufactured goods. 3. We have heard learned counsel for the appellant. 4. Learned counsel for the appellant submits that even though Notification dated 9-7-2004 was in force, the same provided for optional duty and the assessee never invoked the said notification. In such a situation, the view of the Tribunal is against the view taken by it in CCE, Indore v. Surya Roshni Ltd. [2003 (155) ELT 481 (T)] which was upheld by the Supreme [2003 (158) ELT A273 (S.C.)]. As per the said judgment, on capital goods which are exclusively used in manufacture of exempted goods, credit was not available. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Rule 6(4). No substantial question of law arises. 7. Accordingly, the appeal is dismissed. 9. We find in another case, Hon ble High Court of Karnataka in the case of Commissioner of Central Excise, Bangalore Vs. Kailash Auto Builders Ltd., [2012 (280) ELT 49] took a view which is akin to the view expressed by the Hon ble High Court of Punjab Haryana. We reproduce the ratio in paragraph No. 5 of Kailash Auto Builders Ltd. 5 . It is not in dispute that the capital goods were purchased for the purpose of manufacturing the products in the assessee s factory. At the time of purchase, the excise duty was paid by the assessee on the said capital goods. After such purchase, the capital goods are used in the manufacture of both exempted goods and capital goods. In respect of exempted goods, as there was no liability to pay excise duty, the question of availing Cenvat credit in respect of exempted goods did not arise. However, in respect of excisable goods, the duty payable thereon was not paid and the Cenvat credit was utilized. In the entire material on record, there is nothing to indicate that the capital goods were purchased with any undertaking that the said goods wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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