TaxTMI 
TaxTMI 
2014 (11) TMI 79
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....09 (242) ELT 588 (Tri. Del.)], CESTAT Delhi Bench held that by virtue of Explanation -II of exemption Notification No. 14/2002-CE the grey fabrics purchased from the market should be deemed to be duty paid eligible to exemption under Sr. No. 16 of the exemption notification when processed. This view was also adopted by CESTAT, Mumbai [2005 (189) ELT 228 (Tri. Mum.)] and Morarjee Gokuldas Spg. & Wvg. Company Limited vs. CCE Mumbai [2005 (190) ELT 217 (Tri. Mum.)]. Subsequently by a series of following case laws it was held by CESTAT Delhi that the words 'on which duty has been paid' mentioned in the condition in the Exemption Notification No. 14/2002-CE dated 01.3.2002, should mean actual payment of duty:- (i) Auro Textile vs. CCE Chandigarh - [2010 (253) ELT 35 (Tri. Del.)] (ii) M.M. Dyeing & Finishing Mills (p) Limited vs. CCE Ludhiana - [2010 (258) ELT 306 (Tri. Del.)] (iii) Vohra Dyeing vs. CCE Ludhiana- [2010 (259) ELT 605 (Tri. Del.)] 3. Shri P.M. Dave (Advocate) and Shri S.J. Vyas (Advocate) appeared on behalf of the appellants. Shri....
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....retation of the Revenue. That condition No. 3 of Notification No. 14/2002-CE was amended under Notification No.3/2003-CE dated 06.01.2003 where duty paid words were not existing. It was his case that amendment carried out under Notification No. 3/2003-CE is retrospective in view of the following case laws:- (i) Allied Motors Pvt. Limited - [1997 3 SCC 472] (ii) Belapur Sugar & Allied Industries - [1999 (108) ELT 9 (SC)] (iii) UOI vs. Steel Authority of India -[2013-TIOL-384 (Chhattisgarh-HC)] Learned advocate also made the bench go through the relevant notifications and the relied upon case laws. 5. Shri Devang Parikh (Sr. Advocate) appearing as an intervener during hearing, as well as in the written submission, made the following arguments:- (i) That the language of notification before Apex Court in the case of Dhiren Chemical Industries (supra) was different than the language of Notification No. 14/2002-CE used in the present proceedings. (ii) That the words used in Condition-3 to Notification No. 14/2002-CE are 'on which appropriate duty o....
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.... unprocessed knitted and/ or crocheted fabrics does not bear any duty paid therefore, exemption under Notification No. 14/2002-CE cannot be extended to the appellants in the light of law laid down by the Apex Court in the case of Dhiren Chemicals Industries (supra). (iii) That the words 'read with any notification for the time being in force' used in Notification No. 14/2002-CE does not make any difference as dealt with in Para 23 and 26 of the CESTAT order in the case of Auro Textile vs. CCE Chandigarh (supra). (iv) That amendment to Condition 3 of Notification No. 14/2002-CE under Notification No. 3/2003-CE dated 06.1.2003 is a major and substantial change in the notification and cannot be considered as a clarificatory judgment as claimed by the appellants. (v) That explanation II to Notification No. 14/2002-CE only convey that department cannot demand documents evidencing payment of duty on the grey fabrics. It was his case that in the impugned appeals it is not the claim of the appellants that duty is paid on the grey fabrics on which manufacturing activities are carried out. T....
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....tion 1 to 11, 12 6001.11, 6001.21, 6001.91, 6002.42 or 6002.92 Knitted or crocheted fabrics of cotton, subjected to any process Nil Condition No. 3. - If made from knitted or crocheted textile fabrics of cotton, whether or not processed, on which the appropriate duty of excise leviable under the First Schedule to the said Central Excise Tariff Act and the Additional Duties of Excise (Goods of Special Importance) Act, read with any notification for the time being in force, or the additional duty of customs leviable under Section 3 of the Customs Tariff Act, 1975, as the case may be, has been paid and no credit of the duty paid on inputs or capital goods has been taken under rule 3 or rule 11 of the CENVAT Credit Rules, 2002. Explanation -II - For the purposes of the conditions specified below, textile yarns or fabrics shall be deemed to have been duty paid even without production of documents evidencing payment of duty thereon. 8.2 A view was taken by CESTAT before the judgment of Auro Textiles vs. CCE Chandigarh (supra) that exemption under Notification No. 14/2002-CE was admissible but a diagonally opposite view has been taken by CESTAT judgment in the case of Auro ....
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.... taken that all the goods lying in the market are non duty paid by virtue of Sr. No. 10 of Notification No.14/2002-CE then Explanation-II to this notification becomes redundant. Secondly, by presuming that all categories of grey fabrics supplied to the appellants have not discharged any duty that interpretation will be like creating another fiction that all grey fabrics lying in the market are 'deemed not duty paid', unless established by an assessee availing exemption under Notification No. 14/2002-CE. For a claim under Sr. No. 12 of Notification No.14/2002-CE by an assessee it can not be presumed that all grey cotton fabrics received by a textile processor is not duty paid because Sr. No. 10 of the same notification exists. It is also relevant to note that exemption under Sr. No. 10 of this exemption notification is not unconditional but is subject to certain conditions. Thus, the grey fabrics available in the market may not be 100% grey fabrics on which no duty has been paid. That is why a fiction is created under Explanation-II that for the purpose of condition of this notification textile yarn or fabrics shall be deemed to have duty paid even without production of duty paying ....
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....roof of payment of duty. In view of the above legislative intent, we do not agree with the views expressed by CESTAT two Member judgment in the case Auro Textile vs. CCE Chandigarh (Supra) in Para 25 that reliance of the appellant on Explanatory Notes to Budget of 2002 cannot be of any assistance to the assessee. It has been rightly argued by the Senior Advocate in the present proceedings that if the views of the Revenue are accepted than it will lead to chaos and absurdity because making a manufacturer to pay duty again after breading cenvat chain by not taking credit, will burden small processing manufacturers to pay duty again on the processed fabrics when no credit on inputs is taken. Indirectly all the textile processors will be forced to adopt cenvat credit route only to avoid cascading effect of taxation. It will not be in the interest of Small operators to follow only the cenvat credit mode. 8.6 In the case of UOI vs. State of Tripura [AIR 2012 Supreme Court 3240], Apex Court has held that any interpretation which leads to injustices and absurdity must be avoided and in such situations court may look into the purpose for which the statute has been brought and would try to ....
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....d that the Legislature is deemed not to waste its words or to say anything in vain and a construction which attributes redundancy to the legislature will not be accepted except for compelling reasons. Similarly, it is not permissible to add words to a statute which are not there unless on a literal construction being given a part of the statute becomes meaningless. But before any words are read to repair an omission in the Act, it whould be possible to state with certainity that these words would have been inserted by the draftsman and approved by the legislature had their attention been drawn to the omission before the Bill had passed into a law. At times, the intention of the legislature is found to be clear but the unskilfulness of the draftsman in introducing certain words in the statute results in apparent ineffectiveness of the language and in such a situation, it may be permissible for the court to reject the surplus words, so as to make the statute effective. 8.7 In the case of GOI vs. Indian Tobacco Association [2005 (187) ELT 162 (SC)] also Hon'ble Apex Court held that an exemption notification must be construed with regard to the object and purport it seeks to achieve. ....