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TMI Blog2004 (11) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be deemed to have been duty paid even without production of documents evidencing payment of duty thereon. The Explanation thus only takes away the requirement of producing the evidence of duty payment in respect of textile fabrics. It does not anywhere mentions that the appropriate duty of excise leviable on textile fabrics need not be paid or that the textile fabrics shall be deemed to have been duty paid even if it was exempted from payment of duty or it has not suffered any payment of excise duty. The learned SDR has rightly emphasized that the basic condition of payment of appropriate duty has not been done away with. We also agree with the learned SDR that the subsequent amendment in Notification No. 15/2002 by Notification No. 3/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the ground that the condition No. 4 of the Notification has not been satisfied. 3. The learned Advocate submitted that the Appellants have satisfied all the conditions of Notification No. 15/2000-C.E.; that as per condition No. 4 of the Notification, knitted garments are exempt if manufactured out of knitted fabrics on which appropriate duty of excise has been paid and no Cenvat credit of duty paid on the inputs or capital goods has been taken; that Explanation 2 to the Notification provides that fabrics are deemed to be duty paid without production of any duty paying documents; that this condition No. 4 read with Explanation 2 provides that as long as manufacturer does not avail credit of duty paid on inputs, the manufacturer would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of excise' has been paid thereon and consequently the benefit of Notification would not be available. He relied upon the judgment of the Supreme Court in CCE, Vadodara v. Dhiren Chemical Industries, [2002 (139) E.L.T. 3 (S.C.)]. He further mentioned that by Explanation, only production of duty paying documents has been dispensed with; that the basic requirement of payment of duty on fabrics has not been taken away by the said Explanation; that accordingly the benefit of Notification is not available to the impugned goods as the same have been manufactured from the fabrics on which the appropriate duty of excise leviable has been paid. Finally he contended that the subsequent amendment in condition No. 4 by Notification No. 3/2003 will no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the knitted fabrics manufactured by the Appellants is exempt from payment of duty under another Notification No. 14/2002-C.E., dated 1-3-2002, the Appellants have not satisfied the first condition specified in condition No. 4 of Notification No. 15/2002 to the effect that Article of apparel should be made from knitted or crocheted textile fabrics on which the appropriate duty of excise has been paid. The Supreme Court in the case of Dhiren Chemical Industries, supra, has interpreted the phrase "on which the appropriate amount of duty of excise has already been paid." The Apex Court has held as under:- "An exemption notification that uses the said phrase applies to goods which have been made from duty paid material. In the said phrase, du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of duty payment in respect of textile fabrics. It does not anywhere mentions that the appropriate duty of excise leviable on textile fabrics need not be paid or that the textile fabrics shall be deemed to have been duty paid even if it was exempted from payment of duty or it has not suffered any payment of excise duty. Explanation to Notification No. 15/2002-C.E. only clarifies that if the manufacturer is not in a position to produce the duty paying document, the textile fabrics shall be deemed to have been duty paid. The learned SDR has rightly emphasized that the basic condition of payment of appropriate duty has not been done away with. The clarification issued by the Board for clarifying Budget changes does not help the case of the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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