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2015 (2) TMI 559 - AT - Central ExciseDenial of deemed credit - clearance of processed fabrics for home consumption during the period from August, 2001 to March, 2004 under the provisions of para 6 of Notification No. 6/2002-CE (NT) dated 01.03.2002 - Held that:- Mainly for the reasons that after the processing is over the fabrics were inspected by the customers, certain aspects were noticed and in order to rectify the defects, they undertook additional processing such as rotary, peaching or zero zero etc. and job charges for these processing carried out and went unnoticed by the dealing clerk. Which mean that the job charges were not included in the assessable value due to mistake and there was no intention to suppress the facts or intention to evade payment of duty. Therefore it cannot be said that in the facts and circumstances of the case that the appellants were having any intention of fraud, wilfull mis-statement or suppression of facts and have intention to evade payment of duty in contravention to the provisions of the Central Excise Act/Rules. Moreover as already ordered by Tribunal, excess payments on account of loading by 15% were to be adjusted against short payments. Therefore, we hold that in this case the extended period is also not invokable. In this case, we find that for the period 15.8.2001 to 31.3.2003, show cause notice has been issued by invoking extended period of limitation on 23.8.2006, as we hold that the extended period of limitation is not invokable. Therefore, we hold that all the demands in this case are barred by limitation. Appellants are paying duty on job charges plus 15% towards notional profit as per the Trade Notice No. 20/2001 dated 24/03/2001 which was not required to be paid. If the 15% notional profit is excluded then the appellant have paid excess duty which is required to be adjusted against the charges of additional processing such as rotary peaching or zero zero etc.. Then the duty demand would not be there; accordingly the appellant would be entitled to take deemed credit as per notification No. 6/2002 CE(NT) dated 1/3/2002. In these terms when there is no demand of duty against the appellant they are entitle for availing deemed credit as per notification no. 6/2002. In the case of goods cleared for home consumption deemed credit cannot be denied on inputs when duty is paid on final products and provisions of para 6 of notification No. 6/2002 do not get attracted. More so when the excess payment of duty on manufactured products on account of 15% notional credit has not been adjusted. The adjustment has also not been done in case of exports and it cannot be held that export consignments were over-valued. In these circumstances, as extended period of limitation is not invokable consequently demand of duty is not sustainable. Therefore, the appellant has availed deemed credit correctly. - Impugned order is set aside - Decided in favour of assessee.
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