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TMI Blog2009 (7) TMI 1132X X X X Extracts X X X X X X X X Extracts X X X X ..... rn. Inasmuch as the twisted polyester yarn was exempted from payment of duty, Revenue entertained a view that as dyed twisted polyester yarn stand manufactured from non-duty paid twisted polyester yarn, the appellants are not entitled to avail concessional rate of duty provided against Sl. No. 134 of Notification No. 6/2000-C.E., dated 1-3-2000 and Sl. No. 131 of Notification No. 3/2001, dated 1-3-01. Accordingly, the appellants were issued show cause notice on 28-4-05 proposing confirmation of differential duty of Rs. 76,81,379/- along with confirmation of interest and imposition of penalty. Vide his impugned order, the Commissioner confirmed the demand as proposed in the notice and imposed penalty of equal amount on the manufacturing unit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid texturised yarn which is subsequently twisted before dyeing of yarn. 4. We find considerable force in the above contention of learned advocate. Admittedly, the starting raw material is the duty paid texturised yarn which stand turned into an intermediate product i.e. Twisted yarn which in turn is captively used in manufacture of dyed yarn. It is well settled that if A is used in the manufacture of B , which in turn is used in manufacture of C , it can be safely concluded that A has been used in manufacture of C . Admittedly, A is duty paid, and no credit has been availed by the appellant. That being so, an inevitable conclusion would be that the condition of notification stand satisfied by the appellant. 5. We also note t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for exemption only if at the doubling stage duty had been discharged. Moreover, the appellants contended that even if the duty is paid at the doubling stage, Cenvat credit can be availed for clearance of dyed yarn and in effect there would be revenue neutrality. In these circumstances, the appellant s interpretation of condition 19(ii) appears to be correct. In view of these observations, we allow the appeal with consequential relief. 6. By following the ratio of law as declared in the above decision, we hold that the condition of notification stand fulfilled and the impugned order confirming demand of duty is required to be set aside. 7. Apart from the merits of the case, we also note that the demand is barred by limitation having b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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