9911796707
TMI Blog2006 (2) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... eadymade garments falling under Chapter 62 of Central Excise Tariff Act, 1985. The appellants manufactured and cleared readymade garments discharging the duty liability @ 16% i.e. Rs. 91,964/- on the said readymade garments. The purchaser of the appellants goods being Ministry of Defence, Govt. of India, deducted an amount of Rs. 18,593/- from the duty, being deemed credit on the fabric used in the manufacture of readymade garments paid the balance duty, referring to provisions of the notification No. 54/2001-C.E. (N.T.), dated 29-6-2001. The appellants preferred refund claim of Rs.18, 593/- on the ground that they have paid the excess duty by mistake. A show cause notice was issued to the appellants seeking to reject the refund claim on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vat Credit Rules, 2001, by notification No. 54/2001-C.E. (N.T.), dated 29-6-2001 allowed deemed credit on fabrics used in the manufacture of apparels of Chapter 62. To appreciate the correct position, the said notification No. 54/2001-C.E. (N.T.) is reproduced below: "Deemed Cenvat Credit on fabrics used in the manufacture of apparels of Chapter 62 @20% on the duty payable on the apparels, notified: In exercise of the powers conferred by Rule 11 of the Cenvat Credit Rules, 2001, the Central Government hereby declares the following inputs (herein after referred to as the "declared inputs" and final products falling within the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) hereinafter referred to as the said First Sched ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucts. 3. The credit of declared duty allowed in respect of the declared inputs shall be utilized towards payment of duty of excise leviable under the said Central Excise Act on the said final products: PROVIDED that the credit of declared duty in respect of the declared inputs used in the final products cleared for export under bond shall be allowed to be utilised towards payment of duty of excise on the final products cleared for home consumption or for export on payment of duty and where for any reason, such adjustment is not possible, by refund the manufacturer subject to such safeguards, conditions and limitations as may be specified by the Central Government in the Official Gazette. PROVIDED FURTHER that no credit or refund of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Excise (No. 2) Rules, 2001. Explanation II: It is clarified that even if the declared inputs are used directly by a manufacturer of final products, the credit of the declared duty shall, notwithstanding the actual amount of duty paid on such declared in puts, be deemed to be equivalent to the amount specified in this notification and the credit of the declared duty shall be allowed to such manufacturer. Explanation III: For the removal of doubt, it is clarified that the provisions of paragraph 4 shall not apply to a manufacturer who avails of any credit under rule 3 of the Cenvat Credit Rules, 2001, in respect of the declared in puts where the said declared inputs are used in manufacture of final products other than the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ara categorically states that the credit of declared duty in respect of the inputs shall be utilized towards the payment of duty of excise, the correct interpretation of said Para 3 would be that the amount of 20% deemed credit of the duty declared i.e. 16% will be utilised towards payment of duty of excise means that the appellant has to in effect pay duty @ 12.8% of the value of the readymade garments. To my mind, there is no scope of any other interpretation. If this being so, the appellants in this case have paid duty @ 16% instead of 12.8%. It is. admitted that appellants have not recovered the excess paid duty from their customers. The lower authorities have themselves agreed that the refund claim is not barred by limitation nor there ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
