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TMI Blog2024 (4) TMI 624X X X X Extracts X X X X X X X X Extracts X X X X ..... in the manufacture of such goods, if the goods are exported. There is no infirmity in the impugned order passed by the Ld. Commissioner which is upheld by dismissing the appeal filed by the Revenue - appeal is dismissed. - MR. S. S. GARG, MEMBER (JUDICIAL) AND MR. P. ANJANI KUMAR, MEMBER (TECHNICAL) Present for the Appellant: Sh. Anurag Kumar and Shri Aneesh Dewan, Authorized Representatives Present for the Respondent: Sh. Sudhir Malhotra, Advocate ORDER The present appeal filed by the Revenue is directed against the impugned order dated 27.04.2011 passed by the Commissioner (Appeals) whereby the Commissioner (Appeals) has set aside the Order-in-Original dated 10.08.2010 and allowed the appeal of the respondent and set aside the demand. 2. Briefly the facts of the case are that the respondents was registered under the provisions of Central Excise Act, 1944 for manufacture of Articles of Leather under chapter heading 4107/4112 4202/4203/4205 of Central Excise Tariff Act and there is also credit of duty paid on input/chemicals used in processing of leather or unfinished leather which is used by them for making of articles of leather. Three show cause notices dated 04.08.2009, 30.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atio of decision of Bombay High Court in the case of M/s Repro India Ltd. Vs UOI 2009 (235) ELT 614 (Bom) and decision of Himachal High Court in the case of CCE vs Drish Shoes Ltd. 2010 (254) ELT 417. Aggrieved by the said order, the Revenue has filed the present appeal. 4. Heard both the parties and perused the record. 5. Ld. DR for the Revenue submits that the impugned order is not sustainable in law as the Ld. Commissioner has wrongly held that the provision of sub rule (1), (2) (3) of Rule 6 of the Cenvat Credit Rules, 2004 are not applicable in the case the goods are exported out of India. He further submits that the provisions of sub-rule (6) of the Rule 6 of Credit Rules are applicable in the case when the excisable goods are removed without payment of duty for the reason that the same were exported out of India. He further submits that in this case, the goods qualified to be dutiable goods because goods attracting Tariff Rate as NIL , are ab initio exempted and therefore, the provisions of sub-rule (6) of Rule 6 of Credit Rules are not attracted and no Cenvat Credit is available on inputs used in the manufacture of non dutiable goods except in the circumstances mentioned in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... job worker referred to in rule 12AA of the Central Excise Rules, 2002, on the ground that the said inputs are used in the manufacture of goods cleared without payment of duty under the provisions of that rule. (2) Where a manufacturer or provider of output service avails of CENVAT credit in respect of any inputs or input services, 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 take CENVAT credit only on that quantity of input or input service which is intended for use in the manufacture of dutiable goods or in providing output service on which service tax is payable. (3) Notwithstanding anything contained in sub- rules (1) and (2), the manufacturer of goods or the provider of output service, opting not to maintain separate accounts, shall follow either of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l dutiable goods exported. In order to cover such a situation also, Rule 6) of Cenvat Credit Rules, 2004 used the expression 'excisable goods which is wider to include both dutiable as well as exempted goods. 10. Further, we find that this issue has already been considered by the jurisdictional High Court of Himachal Pradesh in the case of CCE vs Drish Shoes Ltd cited (Supra) wherein also the Hon ble High Court after relying upon the decisions of the Bombay High Court in the case of M/s Repro India Ltd. Vs UOI has held as under: 16 . The Scheme of CENVAT Credit Rules, 2002, as also 2004, reference to the relevant provisions made hereinabove, shows that CENVAT credit/refund is allowed on the inputs of all manufactured goods which are not exempt from duty, as is clear from a combined reading of Rule 3 and sub-rule (1) of Rule 5 of the CENVAT Credit Rules, 2002, as also the Rules of 2004, so as to avoid indirect double taxation on inputs. However, this rule is not absolute. It is subject to exception clause, contained in Rule 6(5) of the Rules of 2002 and 6(6) of the Rules of 2004, and one of the exceptions is in respect of excisable goods, which are cleared for export under bond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sub-rules (1), (2), (3) and (4) shall not be applicable, in case of excisable goods, are removed without payment of duty, inter alia, under circumstance adverted to in clause (v) In other words, in a situation where goods are cleared for export under bond, in terms of the provisions of the Central Excise Rules, 2002. 12.2 There is no dispute that, in the instant case, as indicated above, the assessee's goods were cleared for export, albeit under bond. 12.3 Therefore, the question, which arises is, would sub-rule (6) of Rule 6 of the 2004 Rules, would trump in the instant case, the provisions of sub-rule (1) of Rule 6. 13. It is no one's case that the goods manufactured by the assessee were not excisable. Though the goods were excisable, the only reason, that Central Excise duty was not paid or was not payable, was, on account of the provisions of the 2006 notification. Therefore, upon executing the bond, the assessee removed what were otherwise excisable goods without payment of duty. 13.1 One of the exceptions to sub-rule (1) of Rule 6 is a circumstance, where excisable goods are exported pursuant to the execution of bond, in terms of Central Excise Rules, 2002. 14. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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