9911796707
TMI Blog2006 (8) TMI 604X X X X Extracts X X X X X X X X Extracts X X X X ..... of duty under notification No.5/98-CE. 2. Exemption under the notification is available subject to the conditions specified at Sl. No. 10 of the annexure to the notification. A perusal of condition No. 10 shows that exemption under the notification is available subject to the condition that the manufacturer does not avail of credit of duty (i) on the products mentioned in column 2 of Sl. No.69 of the notification or (ii) on other products manufactured in the same factory. There is no dispute on the point that respondent had not availed of the credit of duty paid on the products mentioned in column 2 i.e. products falling under heading 39.23, 39.24 and 39.26. Exemption has been denied to the respondent on the ground that it was availing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the above terms. Parties shall bear their own costs. 6. We have perused the record and heard both sides. 7. The dispute is whether the appellant is eligible for exemption under Notification No.5/98-CE dated 2.6.98 in respect of goods produced by it which are classifiable under heading 39.23.90. Relevant entrees in the Notification may be read: S. No . Chapter or . heading No. or Sub- heading No Description of goods Rate Conditions (1) (2) (3) (4) (5) 69. 39.23, (i) Goods of polyurethanes; (ii) insulated ware; and (iii) bags or sacks made out of fabrics(whether or not coated, covered or laminated with any other material) woven from strips or tapes of plastics; fabrics for making such bags or sacks,- Nil (a) on aggrega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any other products) produced in the same factory. 8. The appellant manufactured other items also in the same factory where exempted goods are produced. In regard to the other goods, the appellant availed itself of MODVAT credit under Rule 57 (1) equivalent to the excise duty paid on the inputs purchased. The submission of the appellant is that taking of input credit on "other products" is not a violation of the condition. The contention is that the bar is on the taking of input credit upon utilization of the 'other products' for further manufacture of yet other goods. According to the appellant this is the plain meaning of the words used in the notification. As against the above contention of the appellant, learned SDR w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meaning of the words used. The prohibition "does not avail of credit of duty paid under Rule 57A or 57B" applies to both the clauses in the condition, the one relating to goods specified in column (2) and other products. The credits contemplated under these rules (57A & 57 B) are in regard to inputs used in manufacture, whether those inputs are procured from outside or are manufactured in house. The reference to the goods covered in both the clauses is also in the same terms- "on the products mentioned in column (2) or on any other products". Thus, the plain meaning of condition is that no input credit should be availed of on the goods mentioned in column (2) or other goods. Since scope of the notification is clear from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e duty on this base. 13. Yet another submission of the learned Counsel of the appellant is that there is no warrant for imposition of any penalty in the present case, inasmuch as it remains settled that this is not a case involving any suppression of facts or mis-declaration of facts so as to attracted duty demand during the extended period under Section 11A as well as penalty. It is also being pointed out that dispute is purely legal in character. There is merit in this contention. The Hon'ble Supreme Court has upheld this Tribunal's earlier order in relation to limitation in the remand order. Also, the dispute is purely legal. In these circumstances, penalty clearly is not warranted. Accordingly, penalty under both the impugned o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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