2007 (7) TMI 530 - AT - Central Excise

Summary

Issues involved: Appeal against the order of the Commissioner (Appeals) setting aside the refund of unutilized credit of duty relating to inputs used in excisable goods exported.

Summary:

Issue 1: Eligibility of deemed credit for unutilized credit refund
The appellant procured grey fabrics on which no duty is payable and claimed deemed credit under Notification No. 6/2002-C.E. The appellant exported finished goods, leading to unutilized credit, which was granted by the Original Authority but denied by the Commissioner (Appeals) on the grounds that grey fabrics are not declared as eligible inputs. The appellant argued that the deemed credit is eligible as duty paid inputs like yarn, chemicals, etc. were used during manufacturing, supported by Board's Circular No. 243/77/96-CX and CBEC's Circular No. 702/18/2003-CX. The Tribunal held that the deemed credit under Notification No. 6/2002 considers duty incidence on various inputs used in grey fabrics, even if the fabrics themselves are not dutiable, thus allowing the appeal and granting consequential relief.

Conclusion:
The Tribunal allowed the appeal, emphasizing the eligibility of deemed credit for unutilized credit refund based on the wide range of inputs used in the grey fabrics, as clarified by relevant circulars, despite the fabrics themselves not being dutiable.