TMI Blog2016 (11) TMI 1163X X X X Extracts X X X X X X X X Extracts X X X X ..... dencing payment of duty thereon, as no duty is payable on Textile Fabric. Therefore, the appellant is not required to produce duty paying documents - reliance placed on the decision of the case of M/s Sports & Leisure Apparel Ltd. [2016 (8) TMI 128 - SUPREME COURT] where it was held 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 exemption Notification Nos. 14/2002 and 15/2002 create legal fiction a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut of which they said goods were manufactured were exempted from the payment of duty, therefore, it was presumed that no duty has been paid, therefore, the appellant is not entitled for benefit of Notification No. 14/2002-CE. Consequently, the impugned proceedings were initiated and the benefit of Notification was denied. Aggrieved from the said order, the appellant is before us. 3. The Ld. Counsel for the appellant is submits that as no duty was payable on Textile Fabrics, therefore, the same is to be demanded as duty paid by the appellant, therefore, the benefit of Notification No. 14/2002 is available to the appellant. To support this contention, he relied on the decision of this Tribunal in the case of Arvind Products Ltd. report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the inputs or the capital goods, were supposed to pay excise duty at concessional rate, i.e., 75% of the normal rate of duty. Under the other scheme, full exemption from payment of duty was granted to those who did not wish to avail the Modvat credit facility. These 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 req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re allowed to clear the goods without payment of any excise duty. It is in this context that the authorities were asked not to insist upon any documentary proof for payment of duty and this was transported 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 exemption Notification Nos. 14/2002 and 15/2002 create legal fict ..... X X X X Extracts X X X X X X X X Extracts X X X X
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