Cenvat credit on yarn used in grey fabrics upheld in principle, with remand limited to quantification of credit.

Cenvat credit on yarn used in grey fabrics was upheld in principle, with the Tribunal's reasoning on the assessee's alternate plea accepted as unobjectionable. The dispute remained open only on quantification, because the record lacked findings on the precise deemed credit and the actual duty paid on the yarn. The matter was therefore limited to determination of the credit amount by the adjudicating authority under the applicable rules, while entitlement to credit stood affirmed.

---

---

Issues: Whether the assessee was entitled to Cenvat credit on the yarn used in grey fabrics and whether the matter required remand only for quantification of the credit.

Analysis: The entitlement to Cenvat credit was upheld on principle, as the Tribunal's reasoning on the assessee's alternate plea was found unobjectionable. However, the record did not contain any finding on the precise quantification of the deemed credit or the actual duty paid on the yarn. In the absence of such quantification, the issue was confined to that limited aspect and required determination by the adjudicating authority under the relevant rules.

Conclusion: The assessee's entitlement to credit was affirmed, but the matter was remitted for fresh consideration only on quantification.

---