2005 (5) TMI 510 - AT - Central Excise

Summary

Issues: Interpretation of Notification No. 29/96-C.E. (N.T.) dated 3-9-1996 regarding availability of Deemed Credit for 'Grey Cotton Fabrics' used in manufacturing 'Processed Cotton Fabrics'.

Analysis:
The judgment delivered by Appellate Tribunal CESTAT, Kolkata involved a case where the applicant/appellant-company sought a stay from duty and penalty based on the interpretation of Notification No. 29/96-C.E. (N.T.) dated 3-9-1996. The duty amount involved was Rs. 1.8 lakh, with an equivalent penalty imposed on the company. The applicant/appellant-company's input material was 'Grey Cotton Fabrics,' and the finished product was 'Processed Cotton Fabrics.' The company claimed that Deemed Credit was available to them, justifying the stay from duty and penalty.

During the proceedings, the learned Advocate representing the company argued for the availability of Deemed Credit based on the mentioned Notification. On the other hand, the learned J.D.R. for the Revenue contended that 'Grey Cotton Fabrics' were not listed as an input in the Notification, thus Deemed Credit could not be extended to the final product, 'Processed Cotton Fabrics.' The J.D.R. highlighted the principle that the language of the Notification should be strictly adhered to without importing additional interpretations, citing a precedent from the Hon'ble Supreme Court.

After hearing both sides and examining the records, the judgment concluded that Notification No. 29/96-C.E. did not include 'Grey Cotton Fabrics' as an eligible input for Deemed Credit. Consequently, the Tribunal agreed with the Revenue's position, directing the applicant/appellant-company to pay the duty amount of Rs. 1.8 lakh within eight weeks. Upon payment of the duty, the penalty and interest were waived off. The case was scheduled for compliance on 29-7-2005, as announced in the open Court.