TaxTMI 
TaxTMI 
2006 (2) TMI 48
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....i.e. Rs. 91,964/- on the said readymade garments. The purchaser of the appellants goods being Ministry of Defence, Govt. of India, deducted an amount of Rs. 18,593/- from the duty, being deemed credit on the fabric used in the manufacture of readymade garments paid the balance duty, referring to provisions of the notification No. 54/2001-C.E. (N.T.), dated 29-6-2001. The appellants preferred refund claim of Rs.18, 593/- on the ground that they have paid the excess duty by mistake. A show cause notice was issued to the appellants seeking to reject the refund claim on various grounds. The adjudicating authority rejected the refund claim mainly on the ground that the appellant has not paid any excess duty and the benefit of notification sho....
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....preciate the correct position, the said notification No. 54/2001-C.E. (N.T.) is reproduced below: "Deemed Cenvat Credit on fabrics used in the manufacture of apparels of Chapter 62 @20% on the duty payable on the apparels, notified: In exercise of the powers conferred by Rule 11 of the Cenvat Credit Rules, 2001, the Central Government hereby declares the following inputs (herein after referred to as the "declared inputs" and final products falling within the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) hereinafter referred to as the said First Schedule, as specified in the Table below, namely: &nb....
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....after referred to as the declared duty) shall be deemed to have been paid on the declared inputs and the same shall be equivalent to the amount calculated at the rate of 20 percent of the duty of excise leviable under the Central Excise Act. 1944 (1 of 1944) read with any notification for the time being in force, on the final products declared herein and credit of the declared duty so deemed to have been paid shall be allowed to the manufacturer of the final products, without production of documents evidencing payment of duty on the declared inputs, at the time of clearance of the said final products. 3. The credit of declared duty allowed in respect of the declared inputs shall be utilized towards payment of duty of excise leviable unde....
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.... (1 of 1944), has not been levied or paid or has been short-levied or short paid or erroneously refunded by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any provision of the said Central Excise Act or of the rules made thereunder with intent to evade payment of duty. 6. This notification shall come into effect on and from 1-7-2001. Explanation I: For the purposes of this notification, the expression "manufacturer" shall include a person who is liable to pay the duty of excise leviable on the said final products under Sub-rule (3) of Rule 4 of the Central Excise (No. 2) Rules, 2001. Explanation II: It is clarified that even if the declared inputs are used directly by....
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....t to show that they are manufacturer of readymade garments and that they are discharging the duty liability on such readymade garments. 5.2 The benefit of notification No. 54/2001-C.E. (N.T.) can be availed by the appellants to the extent of 20% of the duty payable on the readymade garments. In other words, the appellants has to calculate the duty payable on the consignment of the readymade garments and deduct from it 20% of such duty payable. In effect, the net duty payable by the appellants is 12.8% and not 16%. This is very evident from Para 3 of the said notification No. 54/2001-C.E. (N.T.) as reproduced above. The said para categorically states that the credit of declared duty in respect of the inputs shall be utilized towards the p....