2006 (1) TMI 331 - AT - Central Excise

Appellant Denied Exemption Due to Lack of Proof of Duty Payment on Inputs

The Tribunal upheld the Revenue's appeal, denying the appellant the benefit of Notification No. 5/99 & 6/2000-C.E. for goods manufactured without ... Benefit of Notifications No. 5/99-C.E. and 6/2000-C.E. - Interpretation of statutes Issues:Appeal against Order-in-Appeal granting benefit of Notification No. 5/99 & 6/2000-C.E. to appellant for goods without proof of appropriate duty payment. Interpretation of conditions of exemption notification. Burden of proof on appellant to establish compliance with notification. Applicability of precedent regarding exemption notifications.Analysis:The appeal was filed by the Revenue against an Order-in-Appeal where the benefit of Notification No. 5/99 & 6/2000-C.E. was granted to the appellant for goods manufactured without proof of payment of appropriate duty on inputs. The notification exempts duty payment on final products if made from inputs with paid excise duty and no credit taken. The Revenue argued that benefit was wrongly allowed as proof of duty payment on inputs was lacking. They cited a Supreme Court decision to emphasize the appellant's responsibility to comply with the notification terms.The respondent, engaged in cotton yarn processing, claimed they were job working for a principal manufacturer who supplied yarn. They couldn't provide purchase bills for all yarn used due to the manufacturer supplying it. They relied on Tribunal and High Court decisions to support their position. The Tribunal noted that to avail the notification benefits, yarn must have paid duty and no credit taken. As the appellant failed to prove duty payment on yarn used, they couldn't claim exemption. Citing the Supreme Court precedent, strict construction of exemption notifications was emphasized, requiring the assessee to squarely fit within the notification terms. Since the appellant didn't provide evidence of duty payment on yarn, the benefit was denied, and the demand confirmed by the adjudicating authority was upheld without penalty due to the normal demand period.In conclusion, the Tribunal allowed the appeal, emphasizing the strict interpretation of exemption notifications and the burden on the assessee to prove compliance with the notification terms. The decision highlighted the importance of fulfilling the conditions specified in such notifications to claim exemption benefits, as demonstrated by the denial of benefits in this case due to the lack of evidence regarding payment of appropriate duty on the inputs used.