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2015 (12) TMI 1155 - AT - Central ExciseAvailment of concessional rate of duty in terms of Notification No.14/2002-CE, dt.01.03.2002 - Held that - Explanation-II of the said notification provides for the purpose of condition specified in the said notification, textile yarn or fabrics shall be deemed to have duty paid even without production of documents evidencing payment of duty thereon. The larger bench of the Tribunal in the case of Arvind Products Ltd. vs.CCE & ST, Ahmedabad- 2014 (11) TMI 79 - CESTAT AHMEDABAD in the context of Explanation-II of notification No.14/2002-Ce grey fabrics purchased from the market may be deemed to be duty paid eligible to exemption under Sr.No.16 of the said notification when processed. Reference was answered in favour of the assessee and against the Revenue. - appellant claimed benefit for the finished goods under Sr.No.16, We find that in all the cases, the assessees received unprocessed textile fabrics for the processing, so, the appeals before us are covered by the decision of the larger bench of the Tribunal in the case of Arvind Products Ltd. (supra). - Impugned order is not sustainable - Decided in favour of Revenue.
Issues Involved:
Claim of concessional rate of duty under Notification No.14/2002-CE for manufacturing Man Made Processed Knitted Fabrics - Fulfillment of Condition No.5 - Interpretation of Explanation-II of the notification - Applicability of the decision in the case of Arvind Products Ltd. - Benefit claimed for finished goods under Sr.No.16 - Admissibility of benefit considering fabric received for processing as 'deemed duty paid' - Sustainability of impugned orders. Analysis: The judgment revolves around the issue of the Respondents claiming a concessional rate of duty for manufacturing Man Made Processed Knitted Fabrics under Notification No.14/2002-CE. The Respondents were engaged in the manufacture of such fabrics classifiable under sub-heading No.6002.93 of the Central Excise Tariff Act, 1985. They availed the concessional rate of duty for the period September 2002 to March 2003, as per the said notification. The controversy arose as the Revenue contended that the Respondents had not fulfilled Condition No.5 of the notification regarding the appropriate duty payment on unprocessed fabrics, resulting in no duty being paid on the input. However, the Respondents claimed the benefit under Sr.No.16 of the notification for Processed Man Made Knitted Fabrics, subject to fulfilling the conditions. The Tribunal referred to Explanation-II of the notification, which deems textile yarn or fabrics to have duty paid even without documentary evidence. Citing the decision in the case of Arvind Products Ltd., it was established that fabrics purchased from the market could be deemed duty paid and eligible for exemption when processed. The Tribunal emphasized the need to interpret exemption notifications in line with their intended purpose and to favor the taxpayer when multiple interpretations are possible. The Authorized Representative for the Revenue argued that the benefit was claimed for finished goods under Sr.No.16, but the Tribunal found that all cases involved the receipt of unprocessed textile fabrics for processing, aligning with the Arvind Products Ltd. decision. Consequently, the impugned orders were deemed unsustainable, leading to their setting aside and allowing the appeals with consequential relief. In conclusion, the judgment clarifies the application of concessional rates of duty under specific notifications, the importance of fulfilling conditions, and the interpretation of legal provisions to ensure fair treatment of taxpayers. The decision in the referenced case sets a precedent for deeming fabrics as duty paid, emphasizing the need for a taxpayer-friendly approach in statutory interpretations.
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