SUNNY TEXTILES Vs. COMMISSIONER OF C. EX., AHMEDABAD

JUDGEMENT

(1.) THE appellant is engaged in processing of fabrics under Chapters 52, 54 and 55 of the schedule of Central Excise Tariff Act, 1985. Appellant was availing the benefit of cenvat credit. Appellant filed a declaration of stock lying as on 1 -4 -2003 vide letter dated 26 -5 -2003 and availed cenvat credit of Rs. 1,51,012/ -. Appellant took deemed credit as per serial No. 1(c) of table to Notification No. 35/2003 -C.E. (N.T.) dated 10 -4 -2003. On the ground that appellant had cleared grey fabrics without carrying out any process on it, lower authorities have taken a view that the credit is available as per the calculation under serial number 2(b) of the table under Notification No. 35/2003 -C.E. (N.T.), dated 10 -4 -2003 and thereby excess credit of Rs. 45,413/ -, availed by the appellants has been demanded. Further penalty equal to the amount demanded has also been imposed.

(2.) LEARNED advocate submitted that the credit has been denied on the ground that grey fabrics were not their inputs. She submitted that appellant is a manufacturer and the grey fabrics were received by them as inputs only. Just because a small portion of the inputs received has been cleared as such, the credit has been denied. She also submits that at the time of declaration, the grey fabrics declared by them had been received as input only and therefore, credit has been denied correctly. Learned DR on the other hand supports the view taken by the lower authorities that grey fabrics cleared as such, cannot be considered as inputs.

(3.) IN have considered the submissions made by both the sides. There is no dispute that appellant is a manufacturer. They had declared the stock of grey fabrics lying with them and availed the credit of Rs. 1,51,012/ -. There is no dispute that the assessee is engaged in processing of fabrics, just because a portion of the inputs was cleared as such, the lower authorities have taken a view that the credit is to be allowed in terms of serial number 2(b) of the table. Before I proceed further it would be appropriate to reproduce the notification : - Notification No. 35/2003 -Central Excise (N.T.) In exercise of the powers conferred by sub -rule (3) of rule 9A of the Central Excise Rules, 2002, the Central Government, hereby declares, for the purposes of the said rule, the amount of credit of duty, as specified in column (3) of the table below, on inputs lying in stock or in process or on inputs contained in finished goods lying in stock, as specified in the corresponding entry in column (2) of the said Table, namely : -