2004 (6) TMI 379 - AT - Central Excise

Appellants entitled to credit duty on inputs for export under Notification 29/96. Tribunal rejects department's interpretation.

STANDARD INDUSTRIES LTD. Versus COMMISSIONER OF C. EX., MUMBAI-IV

The Tribunal held that the appellants were entitled to credit the duty on inputs for manufacturing final products for export under bond as per ... Cenvat/Modvat Issues:Interpretation of Notification 29/96 regarding credit of duty on inputs for manufacturing final products for export under bond.Analysis:1. Common Issue in Three Separate Orders-in-Appeal:The appeals before the Appellate Tribunal CESTAT, Mumbai arise from three separate orders-in-appeal by the Commissioner (Appeals) concerning a common issue. The appellants, engaged in manufacturing yarn and fabrics falling under specific chapters of the Central Excise Tariff Act, 1985, took credit of duty paid on grey fabrics specified as inputs under Notification 29/96. The manufactured processed fabrics were further used in making-up articles by job workers for export under bond. The department contended that the exemption under the notification was not applicable as the made-up articles were not specified as final products under the notification.2. Interpretation of Proviso 3 to Notification 29/96:The Tribunal analyzed the proviso 3 to Notification 29/96, which states that the credit of declared duty on inputs shall be used for duty payment on final products. The department sought to restrict credit admissibility only if the export was of a final product specified under the notification. However, the Tribunal disagreed with this interpretation, emphasizing the clear language of Clause 3 and its proviso. The Tribunal found the department's reading of the term 'said' in the proviso to be incorrect, leading to the conclusion that the appellants were entitled to the credit in question.3. Decision and Ruling:After hearing both sides, the Tribunal held that the appellants were indeed entitled to the credit amount. Consequently, the impugned orders were set aside, and the appeals were allowed in favor of the appellants. This ruling clarified the application of Notification 29/96 concerning the utilization of duty credit on inputs for manufacturing final products for export under bond, ensuring the correct interpretation of the provisions for similar cases in the future.This detailed analysis of the judgment provides a comprehensive understanding of the issues involved, the legal interpretation applied by the Tribunal, and the final decision rendered in favor of the appellants.