Notification No. 30/2004-CE exempts filament yarn procured from...

Notification No. 30/2004-CE exempts filament yarn procured from outside and subjected to any process by a manufacturer without facilities for manufacturing filament yarns of Chapter 54 from central excise duty. The benefit extends to Chapters 54 and 60 if no CENVAT credit is taken on inputs or capital goods under CENVAT Credit Rules 2002/2004. The appellant claimed separate entities for manufacturing areas, supported by Central Excise Registration and factory plan. For knitted fabric under Chapter 60, though CENVAT credit was availed on initial input, excise duty was paid on intermediate product (POY) used for manufacturing final product without availing CENVAT credit, fulfilling notification conditions. Therefore, knitted fabric is exempted. Claiming exemption known to Revenue cannot be construed as suppression or mala fide intention, making extended period of limitation inapplicable. The demand is set aside on merits and limitation grounds. The appellant's appeals are allowed.