Revenue appeal rejected on fabrics credit pre-2001, assessees' win upheld

The appeal filed by the Revenue challenging the entitlement to deemed credit on fabrics manufactured before 1-5-2001 but cleared thereafter under the compounded levy scheme was rejected. The Tribunal allowed the appeals filed by the assessees, citing the decision in the case of M/s. Bidhata Industries Pvt. Ltd. v. CCE, which held that the scheme applied prospectively. The use of credit for duty payment on such fabrics was deemed lawful. The department did not challenge this decision, leading to the rejection of the Revenue's appeal.

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Issues involved: Determination of entitlement to deemed credit on fabrics manufactured prior to 1-5-2001 but cleared thereafter under the compounded levy scheme.

In the present appeal, the question for decision revolves around whether the appellants are entitled to avail the deemed credit on fabrics manufactured before 1-5-2001 but cleared thereafter, considering their participation in the special procedure under the compounded levy scheme from 1-5-2001. The CESTAT's decision in the case of M/s. Bidhata Industries Pvt. Ltd. v. CCE is referenced, where it was held that the scheme applied only prospectively in respect of fabrics cleared under the compounded levy scheme. The Tribunal allowed the appeal, stating that the use of credit for payment of duty on fabrics manufactured before 1-5-2001 but cleared thereafter was in accordance with the law.

The department failed to demonstrate any challenge to the aforementioned decision, either through an appeal or by a higher authority. Consequently, the appeal filed by the Revenue is rejected, while the appeals filed by the assessees are allowed in line with the principles established in the referenced case law.

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