TMI Blog2017 (3) TMI 360X X X X Extracts X X X X X X X X Extracts X X X X ..... , Member (Judicial) And Mr. Devender Singh, Member (Technical) Sh. V. Gupta, AR- for the appellant Sh. N. Bindal, Advocate - for the respondent ORDER Per Ashok Jindal The Revenue is in appeal against the impugned order. 2. The facts of the case are that the respondent engaged in the manufacture of cotton denim fabrics, cotton yarn and cotton waste. They were availing cenvat credit facility the cotton yarn manufactured by the respondent they captively consumed within the factory of production for manufacture of cotton denim fabrics without payment of duty by availing benefit of exemption Notification No. 22/96-CE dated 23.07.1996. The respondent were also procuring cotton yarn from outside on payment of applicable du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orce or the additional duty of Customs leviable under Section 3 of the Customs Tariff Act, 1975, as the case may be, has been paid. 4. It was alleged that in the light of the CBEC Circular 125/36/95-CX dated 15.05.1995, the appellant is not entitled for the benefit of Notification No. 14/2002. In these set of facts, the proceedings were initiated against the respondent and the matter examined by the adjudicating authority who after examine the issue, dropped the proceedings against the respondent. Aggrieved from the said order, the Revenue is before us. 5. Heard the parties and considered the submissions. 6. Considering the fact that the similar issue came up before this Tribunal in the case of M/s Jarnail Government House in Appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty paid on 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 exempted 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere 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 manufactures 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 No. 14/2002 and 15/2002 create legal ficti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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