K K Spun India Ltd. Vs Commissioner of Central Excise Customs and Service Tax (CESTAT Delhi)
Learned Counsel for the appellant urges that the show cause notice is mis-conceived, as the finished products manufactured by the appellant are not exempted, rather are dutiable @ 10% ad valorem as per CTH 68109990 under the Central Excise Tariff Act. Thus, the finished product of the appellant are taxable in normal course. Only, for supplies made for specific project under Notification No. 12/2012 – CE, exemption is available. In this view of the matter, the appellant have rightly taken the Cenvat credit. Further, admittedly there is no utilisation of such Cenvat credit, for removal of the finished goods. Admittedly, appellant have utilised or reversed such Cenvat credit for payment of duty on removal of capital goods. Thus, it amounts to reversal of Cenvat credit taken by the appellant, as held by Hon’ble Supreme Court in the case of Chandrapur Magnet Industries. Accordingly, he prays for allowing the appeal with consequential benefits.
Having considered the rival contentions, I find that the appellant is entitled to take Cenvat credit on the capital goods, as their finished goods falling under CTH 68109990 are dutiable under the Central Excise Tariff Act. Thus Rule 6(4) of CCR is not attracted. Thus, I hold that the show cause notice is mis-conceived. I further hold that the appellant have rightly taken Cenvat credit on the capital goods.
