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TMI Blog2007 (10) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... - (a) The respondent-assessee is a processor and procured grey fabrics from the market and availed deemed credit of duty provided under Notification No. 7/2001-C.E., dt. 1-3-2001. (b) Show cause notices were issued proposing denial of deemed credit amounting to Rs. 4,04,42,566/- relating to the period March, 2001 to May, 2001 and March, 2002 to March, 2003 on the ground that the grey fabrics falling under chapter heading 52 and 55 have not been specified as inputs in column-2 of the table to the Notification No. 7/2001-C.E. (c) Original Authority, namely the commissioner, dropped the proceedings initiated under the show cause notices. (d) Hence, the Department is in appeal. 4. Ld. SDR submits the following : (i) That the grey fabrics ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing inputs (hereinafter referred to as the "declared inputs") and final products falling within the First Schedule to the Central Excise Tariff Act, 198 5 (5 of 1986) (hereinafter referred to as the said First Schedule), namely :- S. No. Inputs Final products (1) Goods falling within heading No. The following goods manufactured by a composite mill, namely - 51.05, 51.06, 51.07, 52.05, 52.06, 53.06, 53.07, 53.08, 54.02, 54.03, (i) Processed fabrics falling under Chapters 52 (except sub-heading Nos. 5207.20, 5208.20 and 5209.10), 54 (except sub-heading Nos. 5406.10 and 5407.19 ) or 55 (except sub-heading Nos. 5511.10, 5512.10, 5513.10 and 5514.10); or 54.04, 54.05, 55.01, 55.02, 55.03, 55. 04, 55.05, 55.06, 55.07, 55.09, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .T. 465 (T), Damini Printers (P) Ltd. at 2005 (191) E.L.T. 653 (T), Prem Pharmaceuticals, at 2005 (191) E.L.T. 657 (T), Ashok Silk Mills at 2003 (158) E.L.T. 339 (1') and HBL Nife Power Systems Pvt. Ltd. at 2003 (158) E.L.T. 340 (T) in his favour. 8.1 It is to be noted that normally Cenvat credit is available on the inputs used in the manufacture of final products and the credit available is the actual duty paid on the inputs so used in the manufacture of the final products. 8.2 The concept of and procedure relating to deemed credit is on a different footing. The Central Government in exercise of powers conferred under Rule 57 of Central Excise Rules, 1944 prescribed the procedure for what is being referred to as deemed credit in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacturer by a composite mill as well as by a manufacturer other than a composite mill. A mill which is not a composite mill, which processed fabrics - cannot weave the grey fabrics, as in such a case the mill will become a composite mill. The yarn which is used as input for grey fabrics has also been declared as inputs for processed fabrics. In other words, the yam is an input to grey fabrics, 1 which is an input to the processed fabrics and hence has to be treated as input for the processed fabrics. Otherwise the notification will become redundant and unworkable in the above situation. 9. In the light of the above, the interpretation given by the Commissioner appears reasonable and legal. 10. Apparently some of the decisions as in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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