TMI Blog2006 (2) TMI 403X X X X Extracts X X X X X X X X Extracts X X X X ..... puts lying stock, in WIP finished goods as per the rate notified in Notification No. 35/2003 C.E. (N.T.), dated 10th April, 2003. The Revenue issued a SCN for demanding the excess deemed credit availed by the appellants on the pretext that the appellants case of availing deemed credit is covered by the provisions of Notification No. 47/2003-C.E. (N.T.), dated 17-5-2003. The appellants contested the demand on the ground that, when the deemed credit was availed by them the provisions of Notification No. 35/2003-C.E. (N.T.) were in force, and not the provisions of Notification No. 47/2003-C.E. (N.T.). The adjudicating authority confirmed the demand and also imposed penalty, on an appeal against the said order the appellants could not get any relief from the appellate authority. Hence this appeal. 4. The learned Advocate for the appellants submits that the government by enacting Rule 9A of Cenvat Credit Rules, 2002, wanted to give benefit of the Cenvat to the appellants, of the duty paid inputs in stock and the inputs in the W.I.P. and finished goods. He also further submits that they followed procedure given in the Rule 9A of the Cenvat Credit Rules, 2002, read with Notification N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctual payment or duty, shall be entitled to avail credit, calculated in a manner referred to in sub-rule (3), on inputs falling under Chapter 50 to 163 of the First Schedule to the Tariff Act, lying in stock or in process or contained in finished products lying in stock as on 31st day of March, 2003 upon making a written declaration of the description, quantity and value of the stock of each of such goods. The declaration made under this sub-rule shall exclude quantity of stock declared under sub-rule (1). (3) (a) The credit of duty on each such input lying in stock and in process [shall be calculated on the basis of such rates or such manner] as may be notified by the Central Government in this behalf, having regard to the average price of such inputs, and the applicable rate of duty and the quantity of input as declared by the assessee under sub-rule (2). (b) [The credit of duty on inputs contained in fabrics or garments lying in stock] as on the 31st day of March, 2003 shall be calculated in the following manner, namely :- (i) Where the inputs and the finished products are covered under Notification No. 52/2001-Central Excise (N.T.), dated the 29th June, 2001, sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Description Amount of Credit (1) (2) (3) 1. Input lying in stock or in process, namely, - (a) Texturised yarn lying in stock in a composite mill; Rs. 18 per Kg of texturised yarn multiplied by quantity in Kg of such texturised yarn. (b) Yarn other than (a) above (c) Fabrics (unprocessed or processed Deemed value multiplies by the rate of duty on such yarn. Deemed value multiplied by the rate of duty on such fabrics. 2. Finished goods lying in stock, namely,- (a) Unprocessed fabrics of cotton not containing any other textile material; (b) Unprocessed fabric other than (a) above. Declared value multiplied by 26% of the rate of duty on such unprocessed fabrics. Declared value multiplied by 60% of the rate of duty on such unprocessed fabrics. Explanation 1. - For the purposes of this notification, Deemed value shall be calculated in the following manner : [1100 + rate of duty]; Explanation 2. - For the purpose of this notification, rate of duty shall mean the rate of duty leviable under the Central Excise Tariff Act, 1985 (5 of 1986), the Additional Duties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntries relating thereto, the following shall be substituted, namely :- (1) (2) (3) 2 finished goods lying in stock, namely,- (a) Unprocessed fabrics of cotton not containing any other textile material; (b) Unprocessed fabrics other than (a) above; (c) Yarn, which were eligible for exemption, as on 31st March, 2003, from the whole of the excise duty under notification No. 6/2002-Central Excise, dated the 1st March, 2002 (other than the shoddy yarn purchased or procured from outside the factory, and subjected to any process); (d) Articles of appeal and clothing accessories falling under Chapter 61 Declared value multiplied by 26% of the rate of duty on such unprocessed fabrics Declared value multiplied by 60% of the rate of duty on such unprocessed fabrics Deemed value multiplied by the rate of duty on such yarn Declared value multiplied by 12% of the rate of duty on such article of apparel and clothing assessories It can be seen that the table in the above notification has provided for the credit of duty lying in inputs in respect of the Articles of apparel and clothing accessories falling under provision 2(d) of the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 9A(3)(b) but due to an error in drafting Notification No. 35/2003 C.E. (N.T.) the same could have precluded the manufacturers of garments from availing the credit of duty on inputs lying in stock. This rectification of error was undertaken by Notification No. 47/2003 C.E. (N.T.), dated 17-5-2003. I find, that, amending Notification No. 47/2003 C.E. (N.T.) dated 17-5-2003 is issued to rectify a mistake, the effect of substitution of the table in Notification No. 35/2003-C.E. (N.T.) will have effect from 10-4-2003. 7. In view of the above findings, the credit of duty on inputs lying in stock of the appellants has to be calculated as per the provisions in table substituted by Notification No. 47/2003 C.E. (N.T.). 8. Since the issue of availment of amounting of on Credit inputs was a question the interpretation of the notification, the imposition of penalty on the appellants is unwarrented. The penalty imposed on all appellants is liable to be set aside. 9. In view of the above circumstances, all three Order-in-Appeals are liable to be upheld to the extent of demand of the duty of credit on inputs, availed in excess of the calculations as envisaged under Notification No. 47/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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