TaxTMI 
TaxTMI 
2004 (11) TMI 170
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....re knitted/crocheted fabrics, articles of apparel and clothing accessories; that they do not take Cenvat credit of duty paid on any of the inputs used in the manufacture of woven garments; that they avail exemption in respect of knitted garments under serial No. 14 of Notification No. 15/2000-C.E., since knitted garments are manufactured out of duty paid yarn and fibres; that the duty demand has been confirmed and penalties imposed on both the Appellants by the Adjudicating Authority after denying the benefit of the exemption Notification on the ground that the condition No. 4 of the Notification has not been satisfied. 3. The learned Advocate submitted that the Appellants have satisfied all the conditions of Notification No. 15/2000-C.E.;....
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....r crocheted fabric emerges as an intermediate excisable goods which is exempted from excise duty under Notification No. 14/2000-C.E., dated 1-3-2002; that condition No. 4 of Notification No. 15/2002 (serial No. 14) consists of two parts - (a) fabrics must be duty paid, and (b) no credit of duty paid on such fabric had been taken; that thus the benefit of Notification is available only when the garments have been manufactured from duty paid fabrics; that as the fabrics has not suffered Excise duty, it cannot be said that the 'appropriate duty of excise' has been paid thereon and consequently the benefit of Notification would not be available. He relied upon the judgment of the Supreme Court in CCE, Vadodara v. Dhiren Chemical Industries, [20....
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....goods has been taken under Rule 3 or Rule 1 of the Cenvat Credit Rules, 2002." 5.2 Explanation to the Notification reads as under:- "For the purpose of the conditions specified below, textile yarns or textile fabrics shall be deemed to have been duty paid even without production of documents evidencing payment of duty thereon." 6.1 The undisputed facts are that the Appellants buy duty paid yarn, convert them into woven fabrics/knitted fabrics which are then converted into woven garments/knitted garments. The Revenue has contended that as the knitted fabrics manufactured by the Appellants is exempt from payment of duty under another Notification No. 14/2002-C.E., dated 1-3-2002, the Appellants have not satisfied the first condition specif....
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....4 only provides that the manufacturer should not avail of Cenvat credit of the duty paid on inputs. In support he has referred to Explanatory Notes issued by the Board clarifying the changes brought about by Budget 2002 in Central Excise Law. We do not find any force in this contention. Explanation to Notification No. 15/2002-C.E. only mentions that textile fabrics shall be deemed to have been duty paid even without production of documents evidencing payment of duty thereon. The Explanation thus only takes away the requirement of producing the evidence of duty payment in respect of textile fabrics. It does not anywhere mentions that the appropriate duty of excise leviable on textile fabrics need not be paid or that the textile fabrics shall....