Case Law Details
Rishabh Polyester Vs Commissioner of Central Excise (CESTAT Mumbai)
CESTAT Mumbai held that Cenvat credit can be availed for clearance of dyed yarn, if the duty is paid at the doubling stage.
Facts- M/s Shree Rishabh Polyester, aggrieved by order for recovery of ₹ 1,41,391 under section 11A of Central Excise Act, 1944, along with interest thereon under section 11AB of Central Excise Act, 1944, for having claimed the benefit of notification no. 6/2002-CE dated 1st March 2002, restricting liability to ₹ 9 per kg as Cenvat and ‘additional excise duty’ to 15% thereon instead of Cenvat at 16%, ‘special excise duty’ of 16% and ‘additional excise duty’ at 15% thereon, on clearance of ‘dyed yarn’ without complying with condition therein and imposition of penalty of ₹ 5000 under rule 27 of Central Excise Rules, 2002, preferred appeal before the first appellate authority. Dismissal thereto, by order of Commissioner of Central Excise (Appeals) has led to bringing the present dispute before us.
Conclusion- Held that subject to condition that yarn emerging therefrom is exempted from duty, it is only required that the finished goods should have been manufactured either out of duty paid ‘textured yarn’ or ‘twisted yarn’ and that Cenvat Credit on such inputs had not been availed. It is not the case of Revenue that credit had been availed.
Tribunal in re Shreekar Polyester Pvt Ltd has held that the appellants contended that even if the duty is paid at the doubling stage, Cenvat credit can be availed for clearance of dyed yarn and in effect there would be revenue neutrality. In these circumstances, the appellant’s interpretation of condition 19(ii) appears to be correct.
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