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TMI Blog2018 (12) TMI 543X X X X Extracts X X X X X X X X Extracts X X X X ..... er Chitkara (A.R.) ORDER Per: Ramesh Nair The brief facts of the case are that the appellant manufactured and cleared processed knitted cotton fabrics and claimed exemption Notification No. 14/2002-CE dated 01.03.2002 (serial No. 12). The case of the department is that the appellant have used unprocessed knitted fabrics for manufacture of final products i.e. processed knitted cotton fabrics. The unprocessed knitted cotton fabric was procured from their own Gomtipur Unit which has cleared the same availing full exemption under Serial No. 10 of the Notification No. 14/2002-CE. Accordingly, the appellant is not fulfilling the condition no. 3 of the said Notification inasmuch as the unprocessed cotton fabrics used in the manufacture of processed knitted cotton fabric is clearly exempted and no duty was paid consequently, the adjudicating authority confirmed the demand and imposed penalty, therefore, the appellant is before us. 2. Sh. Devan Parikh, Ld. Sr. Counsel appearing on behalf of the appellant, at the outset, submits that identical issue under the same set of facts has been considered by the Larger Bench of this Tribunal in the case of Arvind Products Ltd. v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dition-3 and Explanation-II of Notification No. 14/2002-C.E. are reproduced below :- TABLE S. No. Chapter or heading No., or sub-heading No. Description Rate of duty Condition 1 to 11 12 6001.11, 6001.21, 6001.91, 6002.42 or 6002.92 Knitted or crocheted fabrics of cotton, subjected to any process. Nil 3 Condition No. 3. - If made from knitted or crocheted textile fabrics of cotton, whether or not processed, on which the appropriate duty of excise leviable under the First Schedule to the said Central Excise Tariff Act and the Additional Duties of Excise (Goods of Special Importance) 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 and no credit of the duty paid on inputs or capital goods has been taken under rule 3 or rule 11 of the Cenvat Credit Rules, 2002. Explanatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty paid even without production of documents evidencing payment of duty. In view of the above, it can not be said as held inter alia by CESTAT in the case of Auro Textiles (supra) that a simple and plain reading of the exemption Notification No. 14/2002-C.E. is available. In the existing set of facts and circumstances a harmonious construction/interpretation is required to be made to understand the intention of the framers of Notification No. 14/2002-C.E. If a view is taken that all the goods lying in the market are non duty paid by virtue of Sr. No. 10 of Notification No. 14/2002-C.E. then Explanation-II to this notification becomes redundant. Secondly, by presuming that all categories of grey fabrics supplied to the appellants have not discharged any duty that interpretation will be like creating another fiction that all grey fabrics lying in the market are deemed not duty paid , unless established by an assessee availing exemption under Notification No. 14/2002-C.E. For a claim under Sr. No. 12 of Notification No. 14/2002-C.E., by an assessee, it can not be presumed that all grey cotton fabrics received by a textile processor is not duty paid because Sr. No. 10 of the same n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produce duty paying documents as prescribed under the Cenvat Credit Rules. 8.5 It is evident from the above Explanatory Notes that framers of Notification No. 14/2002-C.E., wanted to extend the benefit of this exemption to the manufacturers subject to the only condition that no Cenvat credit is taken/not taking of such Cenvat credit was not only restricted to inputs but was also to capital goods. It is further clarified that benefit of rate of duty should be allowed without insisting upon any documentary proof of payment of duty. In view of the above legislative intent, we do not agree with the views expressed by CESTAT two Member judgment in the case of Auro Textile v. CCE, Chandigarh (supra) in Para 25 that reliance of the appellant on Explanatory Notes to Budget of 2002 can not be of any assistance to the assessee. It has been rightly argued by the Senior Advocate in the present proceedings that if the views of the Revenue are accepted than it will lead to chaos and absurdity because making a manufacturer to pay duty again after breaking Cenvat chain by not taking credit, will burden small processing manufacturers to pay duty again on the processed fabrics when no credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld adhere to the purpose of the statute. Patanjali Sastri, C.J. in the case of Aswini Kumar Ghose v. Arabinda Bose , 1953 SCR 1 had held that it is not a sound principle of construction to brush aside words in a statute as being inapposite surplusage, if they can have appropriate application in circumstances conceivably within the contemplation of the statute. In Quebec Railway Light Heat and Power Company v. Vandray , AIR 1920 PC 181, It has been observed that the Legislature is deemed not to waste its words or to say anything in vain and a construction which attributes redundancy to the legislature will not be accepted except for compelling reasons. Similarly, it is not permissible to add words to a statute which are not there unless on a literal construction being given a part of the statute becomes meaningless. But before any words are read to repair an omission in the Act, it would be possible to state with certainity that these words would have been inserted by the draftsman and approved by the legislature had their attention been drawn to the omission before the Bill had passed into a law. At times, the intention of the legislature is found to be clear but the unskillfuln ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... delivering judgment in the case of CCE v. Dhiren Chemicals Limited (supra). 10. So far as retrospective nature of Notification No. 3/2003-C.E., dated 6-1-2003, is concerned it is observed that another amendment to Notification No. 14/2002-C.E., dated 1-3-2002 was also made under Notification No. 37/2002-C.E., dated 3-7-2002, when Explanation-VII was added to Notification No. 14/2002-C.E. This explanation added reads as follow :- Explanation VII - In this notification, - (1) for the removal of doubt it is hereby clarified that in Explanation II and in condition Nos. 1 and 2 specified below the Table, the expression textile yarns is intended to include therein textile fibres also : (2) for the purposes of the exemption to processed textile fabrics, specified in the Table against any of the S. Nos. 3, 4, 6, 7, 8, 13 and 16, manufactured by a composite mill (i.e., a manufacturer engaged in processing of fabrics along with the spinning of yarn from fibres and weaving or knitting or crocheting of fabrics within the same factory), or by a manufacturer engaged in processing of fabrics along with weaving or knitting or crocheting of fabrics within the same factory, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s M/s. Sports Leisure Apparel Ltd. v. Commissioner of Central Excise, Noida [ 2016 (338) E.L.T. 3 (S.C.)]. The appeal is, thus, dismissed on the ground of delay as well as on merits. The Appellate Tribunal in its impugned order had held that fiction is created under Explanation-II of Notification No. 14/2002-C.E. that for availing its benefit, inter alia, grey fabrics used in processing shall be deemed to have duty paid even without production of duty paying documents. It was held that there was an apparent conflict between Condition 3 and Explanation-II of said notification and looking at explanatory notes of said notification, it is clear that benefit of this exemption, which was subject to only condition that no Cenvat credit was taken, should be allowed without insisting on any documentary proof of payment of duty. If a contra view is taken, Explanation-II would become redundant. Thus benefit of Sr. No. 12 of said notification was held admissible. Tribunal (Larger Bench) approved decisions in 2009 (242) E.L.T. 588 (Tribunal), 2005 (189) E.L.T. 228 (Tribunal) and 2005 (190) E.L.T. 217 (Tribunal), while overruling decision in 2010 (253) E.L.T. 35 (Tribunal). ..... X X X X Extracts X X X X X X X X Extracts X X X X
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