2009 (2) TMI 206 - AT - Central Excise

CENVAT credit Deemed Credit Job Work - The original authority in both the situations, held that the respondents were not eligible for deemed credit on the processed texturised fabrics received from the job workers who are working under compounded levy scheme on the ground that the movement to the job workers and back to the respondents was under Notification No. 214/86 held that - . As the job worker has done the job work on materials sent under 214/86, the clearances effected by the job worker, in my opinion, can not be deemed to be duty paid - Allowing deemed credit will clearly amount to allowing double benefit - appeals by the Department are allowed by setting aside the order of the Commissioner (Appeals) and restoring the order of the original authority demand confirmed but penalty set aside.

Summary

In the Appellate Tribunal CESTAT, New Delhi case of 2009 (2) TMI 206, the appeals were against the order of Commissioner (Appeals II) dated 10-12-2003. The Tribunal had earlier dismissed the appeals filed by Revenue, but the High Court set aside the order and remitted it back to the Tribunal for a fresh decision. The case involved the procurement of duty paid POY, texturising, and clearance to job workers under Notification No. 214/86. The High Court directed the Tribunal to consider whether the job workers paid duty under the compounded levy scheme. The Tribunal found that the job workers did not pay duty and that the appellant had taken double credit. The Tribunal also considered the movement of grey fabrics under Notification No. 214/86 and the conditions of Notification No. 30/2000. Deemed credit was disallowed to prevent double benefits. The appeals by the Department were allowed, setting aside the Commissioner (Appeals) order and restoring the original authority's decision, with the penalty being set aside. The appeals were disposed of accordingly.