Page 162 - GSTL_11th June 2020_Vol 37_Part 2

248 GST LAW TIMES [ Vol. 37
8/2003-C.E., dated 1-3-2003. The further case of the appellant is that after cross-
ing the exemption limit, it had applied and obtained Central Excise registration
and started paying Central Excise duty during the period under dispute i.e. from
October, 2003 to March, 2004.
2.2 Appellant was found to have cleared the goods without payment of
excise duty by the Departmental Authorities and accordingly show cause notice
was issued to it demanding differential duty amounting to ` 8,75,629/- by deny-
ing benefits of SSI exemption vide Notification No. 8/2003-C.E., dated 1-3-2003
on the alleged ground that the goods dealt by the appellant fell under Heading
54.06 of Central Excise Tariff Act and not under Heading 59.11. Appellant object-
ed the same by filing reply to the show cause notice, matter was adjudicated up-
on, duty demand along with interest and penalty under various provisions of
Central Excise Act, namely equivalent penalty under Section 11AC of the Central
Excise Act, 1944 read with Rule 25 of the Central Excise Rules were imposed on
the appellant who unsuccessfully contested the same before the Commissioner
(Appeals) and approached this forum for effective remedy.
3. In the memo of appeal and during course of hearing of the appeal,
Learned Counsel for the appellant Mr. R V Shetty submitted that Learned Joint
Commissioner had wrongly equated the product “Synthetic Woven Fabrics”
with wearable product but it was meant for industrial and technical use since
barring cotton yarn and silk yarn, all others yarn are synthetic or artificial and
not meant for clothing purposes. His findings were based on the erroneous in-
terpretation of the Board’s Circular No. 48/2/97-CX, dated 17-4-1997 as by no
stench of imagination, it can be inferred that because appellant had not included
fabric covered under Chapter 59 in their registration, which was done subse-
quent to these clearance of products under dispute, it was not entitled to the ben-
efits of SSI exemption available for goods cleared under Chapter 59.11. Learned
Counsel for the appellant further submitted that the appellant had produced
buyers certificate before the lower Authorities to justify that the goods were
meant for industrial/or technical purposes and Board Circular dated 17-4-1997
read with Chapter Note 7 of Chapter 59 provide absolute clarity in the matter,
which was not considered by the Adjudicating Authority, since the same circular
is not applicable in the appellant’s case, as it differs in description of the fabrics
cleared by the appellant and therefore, classification under Chapter 59.11 was
correct. Though not accepting the findings of the Learned Appellate Authority,
the Learned Counsel for the appellant argued that even if the goods are to be
treated as goods covered under Chapter 54.06 still then, appellant was entitled to
Cenvat credit @ 60% of its value that would reduce the duty demand considera-
bly after availing Cenvat credit to the tune of Rs. 5,53,293/- in view of Circular
No. 759/75/2003-CX, dated 30-10-2003 which permits clearance of unprocessed
fabrics manufactured on job work basis for availment of Cenvat credit under
Rule 2H of the Cenvat Credit Rules. Learned Counsel for the appellant also sub-
mitted that the demand is time barred since show cause notice was issued on 17-
4-2006 for the period from April, 2003 to July, 2004 despite any specific allegation
of suppression, which cannot also be made in view of the fact that appellant had
intimated in writing regarding its classification of the product and availment of
SSI exemption to the Department, which is noted by the Commissioner (Appeals)
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