LAWS(CE)-2007-4-270

CCE Vs. NEMLAXMI BOOK (I) PVT. LTD.

Decided On April 11, 2007
CCE Appellant
V/S
Nemlaxmi Book (I) Pvt. Ltd. Respondents

JUDGEMENT

(1.) M /s Nemlaxmi Book (India) Pvt. Ltd. are engaged in the manufacture of stationary items falling under Chapter 48 of Central Excise Tariff Act, 1985. They are selling their final product in the domestic market as well as exporting the same to foreign countries under LUT/Bond under advance license. To fulfill export obligation under advance license, they are purchasing indigenous duty paid raw material and availing credit of the same in their cenvat register. It is stated that the final product manufactured by them attract 'NIL' rate of duty and therefore, there is accumulation of credit in their accounts which they are not able to utilize and, therefore, they filed refund of accumulated credit amounting to Rs. 8,69,628/ -. The adjudicating authority rejected the refund vide OIO No. 139/DC/CPV/OA/2005, dated 29.12.2005. Aggrieved with impugned OIO, the unit filed an appeal with the Commissioner (Appeals) and the Commissioner (Appeals) vide OIA No. RS/195/SRT -II/06 dated 12.06.2006 observed that the grounds on which refund claim of appellant unit has been denied, do not stand to merit and therefore the impugned OIO is set aside with consequential benefit to appellant.

(2.) BEING aggrieved with the order, Revenue has filed the present appeal on the following grounds:

(3.) AFTER hearing both sides, I find that Commissioner (Appeals) has allowed the credit on the above grounds by observing as under: The adjudicating authority has also voiced his concern that as per Cenvat Credit Rules 6(1), cenvat credit shall not be allowed on such quantity of input or input service which is used in the manufacture of exempted goods or exempted service and when cenvat credit itself is not allowed, the question of accumulation and refund of same do not arise. In this regard, I find that there is no such allegation in the Show Cause Notice and therefore, I agree with the contention of the appellants that the adjudicating authority has travelled beyond the Show Cause Notice. I further find that this contention of adjudicating authority do not stand to merit also as the Rule 6(6) (v) of Cenvat Credit Rules, 2004, provides that the provision of Rule 6(1), (2), (3) and (4) shall not be applicable in case the excisable goods are removed without payment of duty or cleared for export under bond in terms of C.Ex. Rules, 2002.