TMI Blog2005 (4) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... e of deemed credit in case of fabrics is in lieu of duty paid on inputs by the processors. It is not the case of the Revenue that the declared inputs i.e. yarn is not contained in the final products. If the contention of the Revenue is accepted, manufacture other than the composite mill will never be eligible to avail the deemed credit under Notification as they will always be bringing only the fabrics whether cotton or man-made for the purpose of processing and column No. 2 of the Notification does not mention any Heading under which fabrics fall. Further Serial No. 2 as well as Serial No. 3 of the Notification No. 6/2002 will be completely redundant as these Serial Nos. provide the facility of deemed credit to the goods manufactured by a manufacturer other than the composite mill. Following the decision in the case of Kamrup Industrial Gases Ltd. v. CEGAT [ 2003 (5) TMI 72 - HIGH COURT OF JUDICATURE AT ALLAHABAD] , we hold that the appellants herein are eligible for availing the deemed credit under Notification No. 6/2002. Consequently, both the impugned orders are set aside and all the three appeals are allowed. - S/Shri V.K. Agrawal, Member (T) and P.S. Bajaj, Member (J) [Ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to avail themselves of Modvat facilities hitherto not extended to them". 3. Learned Advocate further mentioned that in order to give effect to the Budget proposal, the Central Government made suitable amendment in Rule 57A by Notification No. 14/96-C.E. (N.T.), dated 23-7-1996 empowering Central Government to notify the goods for deemed Modvat; that the Central Government issued Notification No. 11/96-C.E., dated 23-7-1996 for fixing rate of deemed credit of the dues in respect of various fabrics and yarn which were deemed to have been paid even if the various fabrics and yarn are not used directly in the manufacture of processed fabrics by the processors; that this Notification was subsequently replaced by Notification No. 29/96-Central Excise (N.T.), dated 3-9-1996 for revising the deemed credit rate; that the Central Board of Excise Customs also issued a Circular No. 243/77/96, dated 3-9-1996 for guidance and proper implementation of the Scheme of Modvat on textile fabrics; that in Para 4.5 of the Circular it was mentioned clearly that "deemed credit is in lieu of duty paid on fibres, yarns, dyes, chemicals, consumables and packaging materials." He contended that in view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )]. 4. Countering the arguments Shri O.P. Arora, learned Senior Departmental Representative and Ms. Charul Barnwal, learned Senior Departmental Representative, submitted that the Appellants being independent processors are covered by S. No. 2 of the Notification No. 6/2002 (N.T.); that the table below the Notification specifies the inputs and final products; that the Appellants are bringing cotton fabrics and man-made fabrics falling under Heading 52.07 and 55.14 of the Central Excise Tariff respectively, which are not mentioned in Column 2 of the Notification which refers to inputs; that once the fabrics brought by them in the factory are not specified as inputs in the Notification, the question of their availing the deemed credit does not arise; that it is settled law by the Supreme Court that the exemption Notification which grants benefit to an assessee has to be interpreted strictly and in case of doubt the benefit has to go to the State Novopan India Ltd. v. CCE [1994 (73) E.L.T. 769 (S.C.). Reliance has also been placed by the learned SDRs on the decision of Larger Bench of the Tribunal in the case of CCE v. Avis Electronics Pvt. Ltd. [2000 (117) E.L.T. 571 (T-LB) = 2000 (37 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic duty on grey fabrics being manufactured by thousands of powerlooms. The Board has also clarified vide Circular No. 243/77/96-CX., dated 3-9-1996 that the rate of deemed credit in case of fabrics is in lieu of duty paid on inputs by the processors. Para 4.5 of the Circular clearly mentioned that deemed credit is in lieu of duty paid on fabrics, yarns, dyes, chemicals, consumables and packaging materials. By issuing Notification No. 6/2002 the Central Government has only declared the inputs and final products in respect of which the deemed credit would be available. The Notification read with Rule 11 makes it very clear that it is not necessary to declare inputs which are used directly by the manufacturer of the final products. What is required for the purpose of being eligible to get the deemed credit is that declared inputs are contained in the final products. It is not the case of the Revenue that the declared inputs i.e. yarn is not contained in the final products. If the contention of the Revenue is accepted, manufacture other than the composite mill will never be eligible to avail the deemed credit under Notification as they will always be bringing only the fabrics whether c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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