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TMI Blog2017 (10) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... icial) And Mr. Raju, Member (Technical) Shri.R.B. Pardeshi, Advocate for appellant Shri.Sanjay Hasija, Supdt. (AR) for respondent ORDER Per : Ramesh Nair 1. The fact of the case is that the appellant at their Solapaur unit is engaged in the knitting and processing of 100% cotton knitted fabrics falling under Chapter No.60 & 63 of the CETA. The appellant have two units, namely, a knitting unit located at Plot No.300, MIDC Akkalkot Road, Solapur, which has not been registered with the department and the processing unit located at Plot No.303, MIDC Akkalkot Road, Solapur, which is a registered unit for manufacturing of excisable goods falling under Chapter heading No.60 & 63 of CETA. The grey knitted fabrics, which is manufactured at Plot No.300 is then sent to the processing unit of the assesee at Plot No.303 for bleaching and dyeing. The grey knitted fabric is processed with the aid of power to obtain dyed processed knitted fabric at processing unit. The said fabric was then cleared from the factory of the appellant to their sales office located at Mumbai from where it is sold to customers. The dyed processed knitted fabric is cleared by raising invoice as per Rule 11 of the Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t demand raised, has been dropped on the ground that the tariff rate of the product was Nil which was considered as the deemed duty paid, for the subsequent period, the only difference is that Nil duty is by virtue of exemption notification. Therefore, it was contended that the goods exempted by notification shall not be treated as deemed duty paid. He further submits, irrespective of whether Nil rate is in the tariff or by virtue of notification, it is one and the same therefore, the same treatment should be given for the period earlier to 26/09/2002 as also the period thereafter. In support of his submission, he placed reliance on the following judgements: a) Arvind Products Ltd. - 2014 (310) ELT 515 (Tri-LB) which has been upheld by the Hon'ble Supreme Court, which reported as 2016 (340) ELT A268 (SC) b) Sports & Leisure Apparel Ltd. - 2016 (338) ELT 3 (SC) c) Vohra Dyeing - 2010 (259) ELT 605 (Tri-Del) 3. On the other hand, Shri Sanjay Hasija, Ld. Superintendent (AR) appearing on behalf of the Revenue reiterates the findings in the impugned order. He submits that since the independent goods manufactured by the appellants other units cleared under exemption notification No.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to use duty paid grey fabrics for manufacture of processed fabrics in order to avail the benefit of the aforesaid Notification No.14/2002-CE. It was contended by the Revenue that since the grey fabrics was manufactured and supplied by their other units without payment of duty as the same is exempted under Notification No.14/2002-CE, the grey fabrics used by the appellants did not suffer the excise duty, accordingly, the Condition No.3 was not complied with. On plain reading of Condition No.3 it is observed that in order to avail exemption Notification No.14/2002-CE the input used in the present case is grey fabrics should have been duty paid. In the present case admittedly, the appellant's unit supplied the grey fabrics on which duty was not paid and the same was exempted under Notification No.14/2002-CE. However, in explanation (ii) is given in the Notification No.14/2002-CE which reads as under: Explanation II. - For the purposes of the conditions specified below, textile yarns or fabrics shall be deemed to have been duty paid even without production of documents evidencing payment of duty thereon. 4.2 From the above explanation, it is clear that all the textile fabrics u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e factory, the condition specified in column (5) against each of the said respective S. Nos. is intended to have been satisfied if the said processed fabrics are manufactured from textile fibres or yarns, as the case may be, on which the appropriate duty of excise leviable under the First or the Second Schedule to the said Central Excise Tariff Act read with any notification for the time being in force or the additional duty of customs leviable under section 3 of the Customs Tariff Act, 1975, as the case may be, has been paid; (3) this Explanation shall have effect as if it had always been the part of this notification." From Explanation-VII (3), it has been made clear that this explanation will have effect as it was always existing as a part of Notification No.14/2002-C.E. Therefore, legislature has the expertise and language to convey where an amendment will be corrective and retrospective. As no such Clause like, the one which exists in Notification No.3/2003-C.E., dated 6-1-2003, is available while amending Condition-3 of Notification No.14/2002-C.E. therefore, the same can not be considered curative and retrospective in operation. 11. In view of the above analysis and ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ired to pay any duty. The rates of deemed credit for processed knitted fabrics of cotton are the same as applicable to woven fabrics. Notification Nos.14/2002-C.E. and 15/2002-C.E., both dated 1-3-2002 prescribes effective rates of duty of nil or 12% adv. in the case of textile fabrics subject to the condition that the goods should have been made from textile yarns or fabrics on which the appropriate excise duty or CVD has been paid. It may, however, be noted that Explanation II to the notification makes it abundantly clear that all fibres and yarns are deemed to have been duty paid even without production of documents evidencing payment of duty. Therefore, the manufacturer is eligible for the rates prescribed in the notification. The only condition that has to be satisfied is with regard to availment or non-availment of Cenvat credit, as the case may be. It is thus made clear that the benefit of the rate of duty should be allowed without insisting upon any documentary proof for payment of duty. However, if the manufacturer wants to avail Cenvat credit of duty paid on inputs or capital goods on actual basis, he will be required to produce duty paying documents as prescribed und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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