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Issues Involved:
The issue in consideration was whether the appellant is required to pay duty on fabric woven and consumed by them, despite the goods being exempted from duty by Notification 67/95, dated 16-3-1995. Summary: The Appellate Tribunal CEGAT, Mumbai, heard a group of appeals including those of M/s. Bombay Dyeing & Manufacturing Co. Ltd. v. CCE, concerning the duty payment on exempted goods. The Commissioner had held that the manufacturer must claim the exemption and cannot choose to pay duty. The Tribunal considered the decision in Everest Convertors v. CCE and other cases, which held that the manufacturer has the option to avail or not avail of the exemption notification. The Tribunal also discussed the circular of the Ministry of Law and the right of the assessee to pay duty on exempted goods and claim modvat credit. Various decisions were cited regarding the nature of exemption notifications and the rates of duty prescribed in the statute. The Tribunal deliberated on whether the exemption notification is part of the Act and whether the benefit of exemption can be availed by the assessee. The arguments presented by the advocates emphasized the right of the assessee to choose to pay duty or avail of the exemption. The Tribunal analyzed previous judgments and the legislative intent behind exemption notifications. It was concluded that the assessee has the right to decide whether to avail of the exemption or pay duty based on the rates prescribed in the statute. The Tribunal addressed the argument that an exemption notification does not replace the rate in the tariff and that there can be multiple exemption notifications for the same commodity. It was also discussed that an element of choice exists for the assessee in availing of an exemption notification, especially in cases where conditions cannot be fulfilled. The Tribunal highlighted the importance of proving eligibility for exemption and the rationale behind an assessee choosing to pay duty despite the availability of exemption benefits. In the final decision, the appeals were allowed, and the impugned orders were set aside, granting consequential relief according to law.
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