2004 (2) TMI 630 - AT - Central Excise

Summary

Issues:
Benefit of deemed credit under Notification No. 29/96 Central Excise (NT) for receiving processed fabrics from job workers.

Analysis:
The dispute in the appeal revolves around the appellants' claim for the benefit of deemed credit under Notification No. 29/96 Central Excise (NT) for receiving processed fabrics from job workers. The appellants received grey fabrics, processed them, cleared them to job workers, and subsequently received the processed fabrics back from the job workers for final clearance from their factory. The main issue is whether the appellants were entitled to avail the facility of deemed credit at the point of final clearance, even though they did not utilize it at the first clearance to job workers. The lower authorities ruled against the appellants, leading to the appeal before the Tribunal.

Upon reviewing the provisions of Notification No. 29/96 Central Excise (NT), specifically explanation II, it is evident that the benefit of deemed credit is not applicable when processed fabrics themselves are used as inputs for further processing. In this case, as the appellants received processed fabrics from job workers, which were then subjected to additional processing before final clearance, the notification does not extend the benefit of deemed credit to the appellants for the inputs received from the job workers.

Based on the analysis of the notification's provisions and the facts of the case, it is concluded that the denial of deemed credit to the appellants by the lower authorities aligns with the law. The Tribunal finds no grounds to interfere with the decision of the lower authorities. Consequently, the appeal is rejected, upholding the lower authorities' decision to deny the appellants the benefit of deemed credit under Notification No. 29/96 Central Excise (NT) for the processed fabrics received from job workers.