2009 (5) TMI 193

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....rics valued at Rs. 7,63,785. 2. The facts leading to the present appeal are, in brief, as under:- 3. The Respondents are engaged in the manufacture of processed knitted man-made fabrics chargeable to Central Excise duty under sub-heading 6002.93 of the tariff. Notification No. 14/02-C.E., dated 1-3-2002 (Sl. No. 16) prescribes a concessional rate of duty of 12% for "processed knitted or crocheted fabrics other than of cotton, subject to condition that the same have been made from "fabrics, whether processed or not", on which appropriate duty of central excise chargeable under First Schedule to the Central Excise Tariff and additional duty of excise chargeable under Additional Duties of Excise (Goods of Special Importance) Act, 1975 [AED(G....

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....hich has been challenged by the Revenue in this appeal on the ground that on enquiries being made by the Asstt. Commissioner, it was found that the Respondent had purchased 3604.590 Kgs. of grey un-processed fabric from the market and had manufactured processed fabric valued at Rs. 4,55,330/- out of the said grey unprocessed fabric and that the Respondent had manufactured and cleared only 2514.590 Kgs of processed fabric valued at Rs. 3,08,455/- manufactured out of yarn purchased from the market and thus the Respondent were entitled to concessional rate of duty in terms of Board's Circular dated 10-12-02, only in respect of the fabrics valued at Rs. 3,08,455/- made out of yarn purchased from the market and not in respect of remaining fabric....

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....ption Notification, which exempts the finished products from duty wholly or partially subject to condition that the goods have been manufactured out of duty paid material, the goods which are fully exempt from duty would not be treated as goods on which the duty has already been paid and therefore, the processed knitted fabrics manufactured from unprocessed knitted fabric purchased from the market are not entitled to concessional rate of duty under Notification No. 14/02-CX. 6. We have carefully considered the submissions of the ld. DR. and have perused the records. Notification No. 14/02-C.E., dated 1-3-2002 (Sl. No. 16) prescribes concessional rate of duty of 12% to "processed knitted or crocheted fabrics, other than of cotton", subject ....

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....bric purchased from the market, which according to the Revenue cannot be treated as duty paid fabrics, as Sl. No. 14 of the same exemption Notification also exempts knitted unprocessed fabrics from the whole of the duty subject to certain conditions specified therein. We do not agree with this contention of the Revenue as Explanation II to the Notification clearly states that for the purpose of the conditions specified in this Notification, the textile yarn, fibre or fabrics shall be deemed to have been paid duty even without production of documents evidencing the payment of duty thereon. In this case 3604.590 Kgs. of processed fabrics valued at Rs. 4,55,330/-have been made out of grey-unprocessed knitted fabrics purchased from the market a....