AI Drafter 
TaxTMI 
TaxTMI 
2016 (8) TMI 117
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....n of Apex Court in the case of Dhiren Chemical Industries-2002 (139) ELT 3 (SC) wherein it has been held that the exempted goods attracting nil rate of duty cannot be treated as goods on which payment of duty at the appropriate rate has been made. The demand of duty was confirmed by the Commissioner. Being aggrieved with the said order, the appellants are in appeal before this Tribunal. 2. Learned Counsel for the appellants relied on the decision of larger bench of the Tribunal in the case of Arvind Products Ltd.-2014 (310) ELT 515 (Tri.-LB). He argued that in the said decision, the exactly the same condition of Notification No. 14/2002-CE dated 1.3.2002 has been examined and it has been held that in the facts of the case, market purchases of the goods cannot be treated as non duty paid. He argued that the exemption to the raw material is a conditional exception an therefore, market purchases cannot be treated as non duty paid. 3. Learned AR relied on the impugned order. 4. We have gone through the rival submissions. We find that the larger bench of the Tribunal in the case of Arvind Products Ltd. (supra) was interpreting the very issue that are under dis....
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....r a claim under Sr. No. 12 of Notification No. 14/2002-C.E., 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 documents. There is no expression like, "except good which are clearly recognizable as non duty paid'' in Explanation-II of Notification No. 14/2002-C.E. to have any doubt. 8.4 In view of the observations made in Para 8.3 above, there is apparent conflict between Condition-3 and Explanation-II of the Notification No.14/2002-C.E., and has to be given a harmonious construction. For understanding the intention of the legislature behind this exemption we are of the considered opinion that on....
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....pted than it will lead to chaos and absurdity because making a manufacturer to pay duty again after breaking 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 v. 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 give a meaning which would adhere to the purpose of that statute. Relevant Para 4 of this judgment is reproduced below :- "4. Before we embark upon an enquiry as to what would be the correct interpretation of Section 28-A, we thin it appropriate to bear in mind certain basic principles of interpretation of statute. The rule stated by Tindal C.J. in Sussex Peerage case, (1844) 11 CI and F 85, still hold....
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....ainity 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 unskillfulness 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 v. Indian Tobacco Association [2005 (187) E.L.T. 162 (S.C.)] also Hon'ble Apex Court held that an exemption notification must be construed with regard to the object and purport it seeks to achieve. It was also laid in this judgment that an expression used in a statute should be given its ordinary meaning unless that meaning leads to anomalous or absurd situation. If the interpretation meant by the Revenue is accepted then every alternate stage of processing will be required to be taxed by virtue of Section 2(f) (ii) of the Central Excise Act, 1944 read with Chapter note 4 of Chapter 52 or Chapter 54 or Chapter 55 of the Central Ex....