2016 (11) TMI 1163 - AT - Central Excise

Tribunal grants benefit under Notification No. 14/2002-CE without proof of duty payment

M/s Sonia Textiles Ltd. Versus C.C.E., Delhi-IV

M/s Sonia Textiles Ltd. Versus C.C.E., Delhi-IV - TMI Issues:Appeal against denial of benefit under Notification No. 14/2002-CE dated 01.03.2002.Detailed Analysis:1. Issue of Denial of Benefit: The appellant appealed against an order denying the benefit of Notification No. 14/2002-CE, which prescribed concessional duty rates for manufactured goods subject to specific conditions. The denial was based on the presumption that no duty was paid on Textile Fabrics used in manufacturing, thus rendering the appellant ineligible for the notification's benefit.2. Contention of Appellant: The appellant argued that since no duty was payable on Textile Fabrics, it should be considered as duty paid by default, entitling them to the benefit of the notification. The appellant relied on precedents such as Arvind Products Ltd. and M/s Sports & Leisure Apparel Ltd. to support this claim.3. Legal Fiction and Exemption Notification: The Tribunal observed that the exemption notification required production of duty payment documents. However, an explanation within the notification created a legal fiction stating that Textile Fabrics shall be deemed duty paid, even without documentary evidence, as no duty was payable on them. This interpretation relieved the appellant from the obligation to produce duty payment documents.4. Precedent and Apex Court Decision: The issue was also addressed in a case before the Hon'ble Apex Court involving Sports & Leisure Apparel Ltd. The Court clarified that manufacturers opting not to avail Modvat facility were allowed to clear goods without paying excise duty. The Court emphasized that the legal fiction created by the notification should be given due weight, and the duty was deemed paid without documentary proof.5. Final Decision: Considering the Apex Court's ruling and the legal fiction created by the notification, the Tribunal concluded that the appellant was not required to provide evidence of duty payment on Textile Fabrics. Consequently, the benefit of Notification No. 14/2002-CE was deemed available to the appellant, leading to the setting aside of the impugned order and allowing the appeal with any consequential relief.In conclusion, the judgment resolved the issue of denial of benefit under the notification by interpreting the legal fiction created within the exemption notification and aligning with the Apex Court's decision on a similar matter, ultimately granting the appellant the benefit sought.