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2018 (6) TMI 915 - AT - Central ExciseBenefit of N/N. 14/2002-CE - processed fabrics - procurement of raw material from the unit availing SSI Exemption - the raw material procured by appellants is admittedly exempted under SSI Exemption under N/N. 8/2001-CE and 8/2002- CE, whereby it attracts nil rate of duty, whether the final product manufactured by the appellant i.e. processed fabrics is eligible for exemption under N/N. 14/2002-CE? - extended period of limitation. Held that:- The condition no.5 of N/N. 14/2002- CE that the excisable goods as specified in the notification are exempted if made from textile fabrics on which the appropriate duty of excise leviable read with any notification has been paid - In the present case it is an admitted fact that the supplier of the raw material has manufactured and cleared the grey fabrics to the appellant without payment of central excise duty availing SSI exemption under N/N. 8/2001-CE & 8/2002-CE. - The Circular No.667/58/2002-CXdated 26.09.2002 clarified that when an exemption is extended subject to the condition that the “appropriate duty has been paid” on the raw material, then such exemption shall not be available when raw material is not liable to excise duty or such duty is nil. The raw material / grey fabrics are clearly known as non duty paid as the same has been cleared by manufacturer after availing SSI exemption. The clearance documents clearly show that no duty has been paid on grey fabrics. In such situation the Explanation –II is not applicable. If Explanation –II is applied in such situations, then the condition no. 5 will be redundant. Extended period of limitation - penalty - Held that:- The appellant was bound to follow the new circular immediately and in case of any doubt they could have approached the department. In absence of the same the allegation of suppression of facts sustain and penalty imposable. Appeal dismissed - decided against appellant.
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