excise on PPMF yarn under NOTF NO 30/2004-CE DT 09.07.2004
ramesh
(Querist) 27 February 2011
This query is : Open
Respected Sir,
I am manufacturing Polypropylene Multifilament yarn(800deniers) from PP Granules being used as intermediate captively in the manufacture of narrow woven fabric. Narrow woven fabric is conditionally exempted subject to non availment of Cenvat credit on inputs. i.e.granules under Notf No 30/2004-CE .Previously I was availing cenvat credit on PP Granules and paying excise duty on narrow woven fabric under Notification No 30/2004-CE dated 09.07.2004 and availing exemption on PPMF Yarn under Notif No 67/95-CE dated 01.03.1995. Now I want to pay duty on intermediate product Polypropylene Multifilament yarn under Notf 67/95-CE dated 01.03.1995 at the value of 110% of cost of production and avail exemption on Narrow woven fabric under Notf No 30/2004-CE. But Notf No 30/2004 provides conditional exemption to Narrow woven fabric subject to non availment of credit on inputs. But I want to avail Cenvat credit on inputs. It is clarified PPMF yarn is unconditional dutiable item not covered under Notf No 30/2004-irrespective of availment on cenvat credit on inputs. Excise officers are asking me to not to avail Cenvat credit on inputs under new scenario and pay duty on PPMF yarn by PLA. My explanation is that I am using duty paid inputs into PPMF Yarn on which I will excise duty and PPMF Yarn is inputs for Narrow woven fabric (exempted) .My question is whether I can avail cenvat on inputs i.e. granules and use in payment of duty on PPMF yarn and also avail exemption on Narrow woven fabric under Notif No 30/2004 which is conditional notf does not allow cenvat credit to inputs if I clear NWF without duty. PPMF yarn which is intermediate for Narrow woven fabric,can be treated as inputs for Narrow woven fabric to fulfil condition of Notf No 30/2004 and to avail exemption on NWF.
Yours regards,
Harish
