Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

M/s. SPORTS & LEISURE APPAREL LTD. Versus COMMISSIONER OF CENTRAL EXCISE, NOIDA

2016 (8) TMI 128 - SUPREME COURT

Whether market purchase goods can be treated as duty paid goods - manufacture of knitted or crocheted fabrics of cotton - benefit of concessional rate or nil rate of duty to the knitted garment manufacturers allowed on certain conditions - Notification No. 14/02-CE and 15/02-CE both dated 01.03.2002 - divergent view is taken by the different Benches of the Tribunal. - One of the conditions is for full exemption is that knitted garments are exempt if manufactured out of knitted fabrics on which a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nsported into the notification, in the form of Explanation II. - It, therefore, becomes clear that when Explanation II states that the duty shall be deemed to have been paid even without production of documents evidencing payment of duty thereon, it was clearly meant that no duty was required to be paid by the manufacturers of knitted garments. Such an intention is clearly reflected in the Government's own Budgetary Notes extracted above. We, thus, hold that Explanation II to the said exemp .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n Chemical Industries case. - Benefit of exemption notification would be available to all these assessees. - Decided against the revenue. - CIVIL APPEAL NO. 1288 OF 2005 - Dated:- 4-3-2016 - A.K. SIKRI AND ROHINTON FALI NARIMAN JJ Civil Appeal Nos. 1288 of 2005 with C. A. Nos. 1752, 1753, 1856, 2267 and 2856 of 2006, 6036 - 6038 of 2008, 4612, 4886, 6749 - 6769, 7247 - 7281, 8186, 8187 - 8189 & 9145 - 9164 of 2010, 2260 of 2011, 5473 & 5474 of 2013 JUDGMENT: All these appeals are tak .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed out of knitted fabrics on which appropriate duty of excise has been paid and no cenvat credit of duty paid on inputs or capital goods has been taken. If Cenvat credit is taken, the duty is at concessional rate. 2. The Revenue has taken the position that the benefit of these notifications is available only when the garments have been manufactured from the duty paid fabrics and in those cases where the fabrics has not suffered excise duty, it cannot be said that the appropriate duty of excise h .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s of the Custom Excise and Service Tax Appellate Tribunal (for short 'CESTAT') has accepted the plea of the assessees holding that benefit of exemption notification would be admissible. Many other Benches of the Tribunal have taken a contrary view, thereby accepting the plea of the Revenue and holding that Condition No. 4 is not satisfied. That is the precise reason for filing two sets of appeals, preferred both by the Revenue as well as those assessees. 3. In order to state the precise .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

arn. The knitted fabric is entirely captively consumed in the manufacture of knitted apparels. The apparels are thereafter cleared outside the factory. 5. Vide Union Budget 2002, a new excise duty scheme for textile sectors was introduced. Under this scheme, vide Notification Nos. 14/2002-CE and 15/2002-CE dated 01.03.2002, fabric manufacturers and garment manufacturers were given an option to operate under two different schemes. Under one scheme, where the manufacturers of the fabric or garment .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

xcise duty for Articles of apparel, knitted or crocheted falling under Heading 61.01, subject to the following condition: If made from knitted or crocheted textile fabrics, whether or not processed on which appropriate duty of excise leviable under the First Schedule to the said Central Excise Tariff Act, and the Additional Duties of Excise (Goods of Special Importance) Act read with any notification for the time being in force or the Additional duty of Customs leviable under Section 3 of the Cu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hereto, grants exemption from whole of duty of excise leviable on knitted garments falling under heading 61.01 subject to the satisfaction of Condition No. 4 of this notification. As per Condition No. 4 of the notification, knitted garments are exempt provided these garments are manufactured out of knitted fabrics on which appropriate excise duty has been paid and no cenvat credit of duty paid on the inputs or capital goods has been taken. 8. Show cause notice dated 27.03.2003 was issued by the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Tribunal against the above order of the Commissioner. In that appeal, the Tribunal passed the impugned final Order Nos. 1239-1240/04-NB(A) upholding the order of the Commissioner on the aspect of denial of Notification No. 15/2002-CE to the apparels. However, the Tribunal has set aside the penalty imposed on the assessee. 9. A perusal of the order of the Tribunal would reveal that for coming to this conclusion, the Tribunal has referred to and relied upon the judgment of this Court in CCE, Vadod .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

emphasis must be given to the words has already been paid . For the purposes of getting the benefit of the exemption under the notification, the goods must be made from raw material on which excise duty has, as a matter of fact, been paid, and has been paid at the appropriate or correct rate. Unless the manufacturer has paid, the correct amount of excise duty he is not entitled to the benefit of the exemption notification. 10. The Tribunal has also rejected the contention of the assesse predicat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tries case, which is a judgment of December, 2001 wherein earlier notification was interpreted by the Court. He submitted that the position changed dramatically thereafter inasmuch as in order to overcome the condition of actual excise duty, Explanation II was specifically inserted in Notification No. 15/02 thereby creating a fiction of deemed duty paid insofar as manufacturers of knitted textile are concerned. For this purpose, he has taken us through the Budget Speech/Explanatory Notes concern .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the same lines on which the Tribunal has rested its decision. 13. We have considered the respective submissions and are of the view that the stand taken by the assessees warrants to succeed. 14. We have already reproduced the relevant portion of Notification No. 15/2002, in particular Condition No. 4 contained therein as well as Explanation II thereof. As pointed out above, in the Union Budget 2002, a new excise duty scheme for textile sector was introduced, as per which manufacturers of the fab .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e two schemes were explained in the Budget Explanatory Notes issued by the Central Government, relevant portion whereof is extracted below: In the case of processed knitted fabrics of cotton, which were hitherto exempt from duty, an optional levy of 12% [8% Cenvat + 4% AED(ST)] has been prescribed. That is, if the manufacturer wants to avail cenvat credit of the duty paid on inputs (either on deemed basis or actual basis) and capital goods (on actual basis), he will be required to pay duty at 12 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ics on which the appropriate excise duty or CVD has been paid. It may, however, be noted that Explanation II to the notification makes it abundantly clear that all fibres and yarns are deemed to have been duty paid even without production of documents evidencing payment of duty. Therefore, the manufacturer is eligible for the rates prescribed in the notification. The only condition that has to be satisfied is with regard to availment or non-availment of cenvat credit, as the case may be. It is t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version