2015 (10) TMI 1931

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... that period, the appellants final products was Covered spandex yarn, classifiable under 5205.90 and chargeable to Nil rate of duty. The appellants also used the credit to the extent of Rs. 90,663/- towards payment of duty on Polyester/Viscose yarn. On pointing out by the preventive officers of the Commissionerate, the appellant had reversed the entire credit of R. 21,85,955/- by debiting in their RG 23A Part-2. Therefore SCN dated 08.01.2002 was issued proposing denial of cenvat credit. Parallaly the department also issued another SCN dated 07.01.2002 proposing to re-classify their final product Covered spandex yarn from ch. 5205.90 to ch. 5201.11of CET which is chargeable to duty @ 16%. The SCN pertaining to the classification and demand ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....he final product is classified under ch. 5205.11 and goods become dutiable they are entitled for modvat credit on the inputs. He further submits that this fact was brought to the notice of the adjudicating authority as well as before the appellate authority and the same was not considered by them. He submits that there were two SCNs issued simultaneously dated 07.1.2002 and 8.1.2002 for demand & denial of credit. When the classification issue was decided by the order dated 23.06.2002 the 2nd SCN denying cenvat credit should have been dropped automatically. He relied on the following decisions in support of his contention. 1. Reckitt Bencksier (India) Ltd. Vs. CCE, Bolpur 2002 (147) ELT 616 (Tri.-Kol) 2. Ajay Industrial Cor....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..... In the said findings on admissibility of cenvat credit on the inputs used in the final products, which has now become dutiable on account of change of classification by the Department. We also find that the classification issued was decided by the Dy. Commissioner of Central Excise in 23.6.2002 whereas the SCN of denial of cenvat credit was decided by the Addl. Commissioner subsequently on 31.03.2003. Though the appellants contended before the adjudicating authority which was recorded at para -20 of the OIO that the final product has been already re-classified under ch. 5205.11 and chargeable to duty and the appellants are eligible for modvat credit, the same was not considered by the adjudicating authority. We also find that the appellan....