Modvat credit on raw materials for hosiery cloth upheld where Notification No. 22/99 permitted the claim.

Modvat credit on raw materials used in the manufacture of hosiery cloth was admissible because Notification No. 22/99 permitted such credit on its wording, and there was no basis to deny the claim. The objection based on Notification No. 21/99, invoked on the footing that hosiery cloth fell under Chapter Sub-Heading 6002.20, did not prevail against the more specific permission reflected in Notification No. 22/99. The operative effect was that the credit claim was allowed and denial of credit on the strength of Notification No. 21/99 failed.

---

---

Issues: Whether Modvat credit was admissible on raw materials used in the manufacture of hosiery cloth in light of Notification No. 21/99 and Notification No. 22/99.

Analysis: The dispute turned on the effect of the two notifications. Notification No. 21/99 was relied upon to deny credit on the footing that hosiery cloth fell under Chapter Sub-Heading 6002.20, but Notification No. 22/99 was examined as permitting Modvat credit on raw materials used in the manufacture of hosiery cloth. On the wording of Notification No. 22/99, there was no justification to deny the credit claimed.

Conclusion: Modvat credit on the raw materials used for manufacture of hosiery cloth was admissible and the objection based on Notification No. 21/99 failed.

---