2000 (8) TMI 483 - AT - Central Excise

Summary

Issues involved:
1. Denial of Modvat credit on bleached fabrics
2. Interpretation of rules regarding removal of goods without payment of duty for export

Issue 1 - Denial of Modvat credit on bleached fabrics:
The two respondents processed bleached fabrics in their factories, removed them without duty payment under Notification 47/94, and exported textile articles. They claimed Modvat credit on duty paid on the fabrics. The Assistant Commissioner issued notices proposing to recover the credit, arguing that only credit on partially processed fabrics, not bleached fabrics, could be taken. The Commissioner (Appeals) allowed the appeals, citing precedents that removal for export under Rule 13 does not equate to removal without duty under Rule 57C. The Tribunal upheld this decision, emphasizing that Rule 57C applies to exemptions, not Rule 13 cases like Notification 47/94.

Issue 2 - Interpretation of rules regarding removal of goods without payment of duty for export:
The appeals did not contest whether bleached fabrics qualify as inputs but focused on the denial of credit. The Tribunal affirmed that goods removed for export under Rule 13 differ from those under an exemption, where Rule 57C would apply. Precedents involving exemptions under Rule 8 or Section 5A were deemed irrelevant as Notification 47/94 implements Rule 13, not an exemption. Therefore, the Tribunal dismissed the appeals, upholding the decision that denial of Modvat credit on bleached fabrics for export was unfounded.