2003 (9) TMI 644 - AT - Central Excise

Summary

Issues: Disallowance of deemed credit under Notification 29/96 for textile fabrics processed by the appellant.

Analysis:
1. The appeal before the Appellate Tribunal CESTAT, Mumbai was against the order of the Commissioner (Appeals) dismissing the appellant's appeal against the order of the Assistant Commissioner, who had disallowed the deemed credit taken by the appellant processor of textile fabrics under Notification 29/96 issued under Rule 57A(2).

2. The disallowance was based on Explanation III below paragraph 7 of the notification, which stated that the notification would not apply if the processed fabric itself was used as an input before processing. In this case, the appellant's input was bleached fabric, leading to the disallowance.

3. The appellant's representative argued that the goods were "half bleached" and qualified for credit as per Trade Notice 91/96 issued by the Commissioner of Central Excise, Ahmedabad. However, the Tribunal found this argument unconvincing, stating that bleaching is a distinct process in textile manufacturing and cannot be considered "half bleached." The Tribunal emphasized that bleaching is a recognized process in the textile trade and, therefore, upheld the disallowance of credit.

4. Ultimately, the Tribunal dismissed the appeal, concluding that there was no valid ground for interference in the decision to disallow the deemed credit under Notification 29/96 for the textile fabrics processed by the appellant. The judgment highlights the importance of adhering to the specific provisions and definitions in notifications and trade practices within the textile industry to determine eligibility for credits and benefits.