2010 (9) TMI 242

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....rom the said yarn, the same are further converted into leather cloth. The said leather cloth cleared by the appellant does not attract any duty under AED (T&TA) but they are required to pay basic duty as also Additional Excise Duty (Goods of Special Importance) Act [referred to as AED (GSI)]. They used the modvat credit of AED (T&TA) to discharge their obligation of AED (GSI). This was objected to by the Revenue and proceedings were initiated against them for denial of credit, by way of issuance of two show cause notices dated 02.08.99 and 13.01.02. The said show cause notices were adjudicated by the Deputy Commissioner, Central Excise, Vadodara vide his order dated 28.09.2000. Vide the said order the Deputy Commissioner observed that the c....

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....tled by the Tribunal s decisions. In the case of Reliance Industries Ltd. Vs. CCE Ahmedabad reported in 2002 (150) ELT 479 (Tribunal), it was held that the credit of duty paid under Section 3 of additional duties of excise (Textile and Textile Articles) Act, 1978 can be used towards payment of duty under Additional Duties of Excise (Goods of Special Importance) Act, 1957. The said decision stands followed in number of subsequent decisions of the Tribunal. Reference in this regard can be made to the Tribunal s judgment in the case of Grasim Industries Ltd. [2003 (54) RLT 288 (CESTAT Del.)]. As such it stands concluded by the above judgments, that the duty credit of AED (T&TA) can be utilized under the payment of AED (GSI). 4. The appellan....

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....inal excisable products . As yarn is being used in manufacture of leather cloth, the credit of Additional Excise Duty (T&TA) is allowed to be availed by the manufacturer. There is no restriction on such availment and manufacturer can keep on accumulating such modvat credit. The only restriction is that credit of A.E.D. (T&TA) is to be only utilized for payment of A.E.D. (T&TA) but they can surely utilize the said credit for clearance of yarn/rejected yarn under Rule 57F of the Rules. That, as the credit has been taken legally, they can always utilize it in the future for clearance of yarn/rejected yarn or any product on which A.E.D. (T&TA) is payable. I do not find any merits in the show cause notices and hereby pass the following order.....