TaxTMI 
TaxTMI 
2017 (5) TMI 39
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....ption Notification No. 15/2002-CE dated 01.03.2002, S. No. 14. The benefit of exemption Notification was denied on the ground that the appellant has not complied with the condition of the Notification for availament of the benefit of said Notification, therefore, the demand of duty was confirmed against the appellant along with interest and penalty was also imposed. Aggrieved from the said order, the appellant is before us. 3. The Ld. Counsel for the appellant submits that the benefit of exemption Notification sought to be denied on the ground that as per condition of the said notification, the fabric which has been used in the manufacturing of garments has not suffered duty, as the same is exempt, therefore, no duty has been paid on the i....
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....ded exemption and concessional rates respectively. Those who wanted to avail the Modvat Credit of the duty paid on the inputs or the capital goods, were supposed to pay excise duty at concessional rete, i.e. 75% of the normal rate of duty. Under the other scheme, full exemption from payment of duty was granted to those who did not wish to avail the Modvat credit facility. These two schemes were explained in the Budget Explanatory Notes issued by the Central Government, relevant portion whereof is extracted below: In the case of processes knitted fabrics of cotton, which were hitherto exempt from duty, an optional levy of 12% [8% Cenvat + 4% AED (ST)]has been prescribed. That is, if the manufacturer wants to avail cenvat credit of the duty....
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....oresaid Explanatory Note makes it clear that those who did not want to avail modvat facility were allowed to clear the goods without payment of any excise duty. It is in this context that the authorities were asked not to insist upon any documentary proof for payment of duty and this was transported into the notification, in the form of Explanation II. It, therefore, becomes clear that when explanation II states that the duty shall be deemed to have been paid even without production of documents evidencing payment of duty thereon, it was clearly meant that no duty was required to be paid by the manufactures of knitted garments. Such an intention is clearly reflected in the Governments own budgetary notes extracted above. We thus hold that e....