TMI Blog2010 (2) TMI 361X X X X Extracts X X X X X X X X Extracts X X X X ..... mposite mills. We, therefore, decide the question against the Revenue and in favour of the respondent-assessee. The appeal is dismissed. - 2 of 2007, - - - Dated:- 1-2-2010 - Badar Durrez Ahmed and Siddharth Mridul, JJ. Shri Baldev Malik, Advocate, for the Appellant. Shri Sanjay Grover, Advocate, for the Respondent. [Judgment per : Badar Durrez Ahmed, J. (Oral)]. - Admit. 2. The following substantial question of law, arises for our consideration :- Whether the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) was right in allowing deemed credit in respect of the fibre/yarn used in the grey fabrics which was an indirect input in the assessee's final product processed fabric, in view of the Notification No. 6/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that there are two types of mills producing processed fabrics. They are composite mills and "other than composite mills", which are commonly referred to as non-composite mills. He submitted that the said notification specifically referred to both composite mills as well as non composite mills. He also contended that that the difference between the two kinds of mills is that, in the case of composite mills the input is yarn/fibre which converted by the said mills into the intermediate product-grey fabric which is further converted, after series of processing activities, into processed fabric. On the other hand, in non-composite mills, the direct input is grey fabric which is processed to manufacture the final product-processed fabric. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government to notify goods for deemed Cenvat credit. — Notwithstanding anything contained in Rule 3, the Central Government may, by notification in the Official Gazette declare the inputs on which the duties of excise, or additional duty of customs paid, shall be deemed to have been paid at such rate or equivalent to such amount as may be specified in the said notification and allow Cenvat credit of such duty deemed to have been paid in such manner and subject so such conditions as may be specified in the said notification even if the declared inputs are not used directly by the manufacturer of final products declared in the said notification, but are contained in the said final products." (underlining added) 8. It is pertinent to note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02, 54.03, 54.04, 54.05, 55.01, 53.07, 55.02, 55.03, 55.04, 55.05, 55.06, 55.07, 55.09, 55.10, 56.04, 56.05 or 56.06 of the said First Schedule The following goods manufactured by a composite mill, namely :- (i) Processed fabrics falling under Chapters 52 (except sub-heading Nos. 5207.20, 5208.20 and 5209.10), 54 (except sub-heading Nos. 5406.10 and 5407.10), 55 (except sub-heading Nos. 5511.10, 5512.10, 5513.10 and 5514.10), 60.01 or 60.02 (except sub-heading No. 6002.10); or (ii) Fabrics of cotton or man-made fibres, whether or not processed, falling under heading Nos. 58.01, 58.02 or 58.06 (except sub heading No. 5806.20) of the said First Schedule. (2) (i) Goods falling within heading Nos. 51.05, 51.06, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturer who is engaged in the processing of fabrics with the aid of power along with the spinning of yarn from fibres and weaving or knitting or crocheting of fabrics within the same factory and includes a multi-locational composite mill, i.e. public limited company which is engaged in the processing of fabrics with the aid of power along with the spinning of yarn from fibres and weaving, or knitting or crocheting of fabrics in one or more factories owned by the same public limited company. Explanation 3.- For the removal of doubt it is clarified that the provisions of this notification shall not apply where processed fabric itself issued as an input for further processing. ………….. …………." 10. A plain reading of the said notific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty of excise or additional duty of customs shall be deemed to have been paid at such rate as may be specified in the notification and to allow Cenvat credit of such duty deemed to have been paid even if the declared inputs are not used directly by the manufacturer of final products declared in the notification but are contained in the final products. The Tribunal went on to examine the said Notification No. 6/2002-(N.T.) in the light of Rule 11 as also in the light of the clarification given in the circular of 13th March, 2003. Thereafter the Tribunal came to the conclusion that the contention of the Revenue was not correct inasmuch as the said Notification No. 6/2002 had been issued under Rule 11 of the Cenvat Credit Rules, 2002, which c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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