2005 (4) TMI 237

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....sioner (Appeals) upholding the confirmation of demand of Rs. 33,03,450/- and imposition of a penalty of equivalent amount, by the Asst. Commissioner of Central Excise (subject matter of Appeal No. 2585/04). 2. The appellants herein are engaged in the manufacture of yarn, fabrics etc. falling under Chapters 52 & 55 of the Schedule to the CETA, 1985. For the manufacture of the yarn and fabrics etc. they have a factory in Elphinstone Road at Mumbai. They have another mill known as Spring Mill wherein grey fabrics are manufactured out of yarn spun therein. During the period 3-9-96 to 2-6-98, Notification No. 29/96-C.E., dated 3-9-96 extended deemed credit to grey fabrics at the time of payment of duty on processed fabrics. In that Notificati....

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....l the provisions of this Notification shall apply only to processed fabrics manufactured from unprocessed fabrics not woven in the same composite mill...................". The department was of the view that the benefit of deemed credit under this Notification was not available to the appellants herein by virtue of the fact that the grey fabrics have been manufactured in the same Multi Locational Composite Mill and therefore the processed fabrics would not get the benefit of deemed credit, although under Notification 14/02 dated 1-3-2002 the above was available to composite mill who cleared grey fabrics without payment of duty. Show Cause Notice dated 25-3-2003 proposing to denial of benefit of deemed credit at the rate of 26% of the duty p....