2006 (2) TMI 466

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..... polyester yarn falling under SH 5509.22 of the CETA Schedule) under the said notification in terms of Sl. No. 133 in the Table annexed thereto, subject to certain condition. The relevant condition (No. 21 in the List of Conditions annexed to the Table) reads as under :- "21. If manufactured out of yarn - (i) falling under Chapter 51, 52, 54 or 55 of the said Schedule; and (ii) on which the appropriate duty of excise under the said Schedule, the special duty of excise leviable under the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) or as the case may be, the additional duty leviable under the Customs Tariff Act, 1975 (51 of 1975), has already been paid; and (iii) no credit under Rule 57A or 57B or 57Q of the Cen .....

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..... and consequently, at this stage, it could not be said that they had availed credit on inputs or capital goods credit on machinery used in the process of dyeing during the aforesaid periods (1997-98 and 1998-99). In this connection, reliance was placed on the following decisions :- (i) Franco Italian Co. Pvt. Ltd. v. Commissioner - 2000 (120) E.L.T. 792 (Tri. - LB) (ii) Hello Minerals Water (P) Ltd. v. Union of India - 2004 (174) E.L.T. 422 (All.) (iii) Bharath Earth Movers Ltd. v. Collector - 2001 (136) E.L.T. 225 (Tri.- Bang.) (iv) Kathan Nadar Company v. The State of Madras - (1963) STC 694 Learned Senior Advocate argued that, in all the cited cases, equity was done to assessees who claimed tax exemption under statutory provision .....

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..... ntioned (1997-98 & 1998-99). This contention is apparently supported by the decisions cited by learned counsel. In the case of Franco Italian Co. Pvt. Ltd. (supra) the Tribunal's Larger Bench allowed SSI benefit under Notification No. 1/93-C.E. to the assessee in respect of specified goods subject to the condition that the Modvat credit taken on the inputs utilized in the manufacture of such specified goods be reversed. This view was followed, with approval, by the Allahabad High Court in the case of Hello Minerals Water (P) Ltd. (supra). Similarly, in the case of Bharath Earth Movers Ltd. (supra), the benefit of Notification No. 452/86-C.E. was allowed to the assessee, subject to reversal of credit on inputs. In the instant case also, we a .....

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