2010 (8) TMI 374 - AT - Central Excise

Textile and textile articles - concessional rate of duty in terms of Notification No. 14/2002-C.E assessee entitled for deemed credit in relation to the duty paid on inputs - condition specified appropriate duty of excise leviable under the First or the Second Schedule to the said Central Excise Tariff Act read with any notification for the time being in force or the additional duty of customs leviable under Section 3 of the Customs Tariff Act, 1975, should be paid - Whether the goods are subjected to payment of duty or not has to be established by procuring necessary material as regards the payment of duty by the assessee who wants to claim necessary concession under the Notification - burden in that regard would lie upon the claimant - unilateral document by the assessee cannot be termed as proof of payment of duty - onus would not shift upon the Department till primary burden in this regard is discharged by the assessee Assessee failed to discharge burden Appeal rejected

Summary

Issues:
Whether concessional rate of duty in terms of Notification No. 14/2002-C.E. is available to the appellants or not.

Analysis:
The appellants, engaged in the manufacture of man-made processed knitted fabrics, were paying concessional duty under Notification No. 14/2002-C.E. The issue revolved around whether the appellants were eligible for this concessional rate of duty. The products were made from textile fabrics exempted from excise duty, leading to a dispute regarding the duty payment on inputs. The Tribunal referred to a previous decision in Auro Textile's case, emphasizing the requirement of actual payment of duty to avail benefits under the notification.

The Explanation II of the Notification was crucial in determining the duty liability. It clarified that the benefit under the notification was subject to the discharge of duty liability, absolving the assessee from proving the duty payment. The Tribunal highlighted that this explanation did not imply that duty need not be paid on textile fabrics. The decision in Sports & Leisure Apparel Limited case also supported this interpretation, emphasizing the importance of actual duty payment.

The appellants cited a Delhi High Court decision regarding deemed credit, but the Tribunal clarified that the issue at hand focused on the claim of concession under the Notification concerning duty payment, not deemed credit. The Tribunal examined the specific provision in the Notification related to processed textile fabrics and reiterated the necessity of proving duty payment to claim concession benefits.

Regarding penalty imposition, the Tribunal, following the precedent set in Auro Textile's case, concluded that since the matter involved interpretation of the Notification, there was no justification for penalty imposition. Consequently, the challenge to the penalty imposition was upheld, and the orders in that regard were set aside. The appeals partly succeeded on the penalty issue, with no further interference required in the impugned order. The penalty was set aside, and the rest of the challenges in the appeals were rejected, leading to the disposal of the appeals accordingly.