2019 (12) TMI 544

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....d in spinning of cotton yarn from cotton fibres, weaving of grey fabrics and processing of said grey fabrics with the aid of power. During the relevant period from Mar 2002 to Sep 2002, they had availed benefit of Notification No. 14/2002-CE dated 01 Mar 2002 and cleared the finished goods on payment of concessional rate of duty. Alleging that the appellant are not eligible to avail benefit of the notification, a demand notice was issued to them for recovery of the differential duty of Rs. 58,38,480/- (Rupees fifty eight lakh thirty eight thousand four hundred eighty only) with interest and penalty. On adjudication, the demand was confirmed with interest and penalty. Aggrieved by the said order, they filed an appeal before the learned Commi....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....choice to opt under one of two schemes. Normal rate of duty is 12%. The two notifications provided 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 rate, 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 processed knitted fabrics of cotton, which were hitherto exempt from duty, an optional levy of 12% [8% Cenvat....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....he will be required to produce duty paying documents as prescribed under the Cenvat credit rules." 15. A reading of the aforesaid 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 manufacturers of ....