9911796707
TMI Blog2000 (6) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... accumulated in the appellants' Modvat account with respect to Partially Oriented Yarn (POY) cannot be utilised for discharging duty on the end product viz., dyed yarn, because POY was an input for textured yarn and not an input in the manufacture of Dyed yarn, the final product manufactured by the appellants though dyed yarn was made out of textured yarn. The period involved was from November, 1997 to March, 1998. 3. Appellants are engaged in the manufacture of Nylone/Polyester Textured/Dyed Yarn. The main raw material for the manufacture of the aforesaid goods is POY which the appellants procured from manufacturers on payment of appropriate Central Excise duty. The appellants availed of the Modvat credit of duty paid on POY and utili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yarn which was taken away from 11-4-97 (because appellants were having the facility to manufacture textured yarn) was again restored to them on and from 6-6-97 by amending Notfn. No. 34/97. However, by amending Notfn. No. 34/97, two conditions were added to the notification, viz., the dyed yarn is manufactured out of textured or twisted yarn falling under Chapter 54 on which appropriate duty had been paid and "no credit under Rule 57A or Rule 57Q had been availed of in the process of Dyeing, Printing, Bleaching or Mercerising in the manufacture of dyed, printed, bleached, mercerised yarn". 4. The appellants' case is that they had satisfied all the conditions stipulated in Notfn. No. 4/97 as amended by subsequent notifications and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellants a second time since the appellants had already paid duty for the same quantity of yarn through debit in RG.23A Part II. The demand raised by the Department is, according to the Counsel, based on a wrong reading of the conditions under Para 15C of the Notfn. No. 4/97 as amended and on the wrong assumption that the said condition does not permit payment of duty on dyed yarn through a debit in RG.23A Part II. According to the ld. Advocate, there is nothing in the said notification preventing the appellants from claiming the concessional rate of duty of Rs. 6 per kg on dyed yarn. The only two conditions required to be complied with by the appellants under condition 15C were that (a) the dyed yarn was manufactured out of duty paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... represent any credit availed on any inputs or capital goods used "in the process of dyeing", which alone was barred by condition 15 C (b) of the notification. The appellants therefore contend that they had not violated any condition of the notification and the interpretation given by the Department to the condition (b) of Para 15C was not correct and needs to be set aside. It is also contended that there was no condition in the notification that the concessional rate of Rs. 6 per kg. on dyed yarn should be paid only through PLA. There was no basis for taking the view that the appellants should pay the duty on dyed yarn through PLA which in fact would amount to paying duty a second time. According to the appellants the interpretation given b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utilised for payment of duty "on any other final product". It was also not necessary to establish a one-to-one relationship between the input and the final product. In the instant case, since the final product retained the character of yarn even after texturing and dyeing, the distinction sought to be made between textured yarn and dyed yarn was also not sustainable. Reliance was placed on the Tribunal decision in Siyaram Platex (P) Ltd. v. CCE [1998 (98) E.L.T. 310] in which it was held that when there is some unutilised credit in respect of an intermediate product on a particular date and such intermediate product is subsequently used in the manufacture of a revised final product which had been delcared for Modvat purpose, such unutilised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since under the said condition, no credit under Rule 57A can be availed for the manufacture of dyed yarn. We are unable to read such a prohibition in the wording of the second condition of 15C. We are inclined to agree with the interpretation sought to be put on the said condition by the appellants inasmuch as the bar of availing of credit is restricted to cases where credit has been taken in the process of dyeing, printing, etc. The construction put by the appellants to this condition is that it refers to the credit taken in the process of dyeing, printing etc. such as those relating to credit taken on inputs which go into the dyeing, printing etc. such as chemicals, machinery etc. used for dyeing, printing etc. In the present case, the cr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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