SRI RAJA VINAYAGAR MILLS Vs. CESTAT, CHENNAI

JUDGEMENT

(1.) THIS appeal is by the assessee, questioning the correctness of the order of the CESTAT, confirming the demand of duty, but, setting aside the penalty. Heard Mr. T. Ramesh, learned counsel for the appellant and Mr. S. Xavier Felix, learned Standing Counsel for the respondent/Department.

(2.) THE appellant cleared VSF Yarn in hanks without payment of duty by claiming exemption under Notification No. 3/2001 -C.E., dated 1 -3 -2001. As per this notification, the raw materials brought into the factory should be duty paid and no Cenvat credit should be taken for those materials to avail of the full exemption.

(3.) THE appellant submitted a reply contending that Section 11D is not attracted and that in any case, credit notes were issued to the sellers. After perusal of the invoices and books of accounts of the appellants, the Deputy Commissioner of Central Excise, by an order -in -original, passed on 8 -9 -2005, dropped further proceedings, on the ground that the appellant did not retain any account representing excise duty, warranting action under Section 11D.