Decided on January 02,2015



P.K.Das, Member (J) - (1.)NONE appears on behalf of the respondent. There is no application for adjournment.
(2.)AFTER hearing the learned Authorised Representative and on perusal of the records, I find that the Respondents are engaged in the trading of Grey Man Made Fabric (MMF) classifiable under Chapter 54 of Central Excise Tariff Act, 1985. The issue involved in this case is whether the CENVAT Credit is to be allowed for the declared stock of Grey Man Made Fabrics (by considering it as input) as per Sr. No. 1(c) of Table appended to the Notification No. , dt. 10.04.2003 as amended or as per Sr. No. 2 (b) (by considering it as finished goods in stock.) The Adjudicating authority confirmed the demand of CENVAT Credit of Rs. 91,811.00 along with interest and penalty, holding that the stock of Grey MMF is the finished goods to the respondent -dealer and cannot be treated as input/raw material.
By the impugned order, Commissioner (Appeals) following the decision of the Tribunal held that the dealer is introduced between the manufacturer and the processor, the nature of product as input cannot undergo any change, and it would cover under Sr. No. (c) of the said notification.

(3.)I find that this view was approved by the Hon'ble Gujarat High Court in the case of CCE Ahmedabad -I v. Rajkamal Textile Traders : 2010 (258) ELT 189 (Guj.), and dismissed the appeal filed by the Revenue. It has been held as under: - -
"2. Question raised whether the Tribunal is justified in holding that the grey fabrics i.e. unprocessed stock of fabrics held by a dealer is input in terms of Notification No. dated 10 -4 -2003. The Tribunal has examined the issue and opined that the problem related to term. So far as the present case is concerned, the Tribunal concluded that man -made grey fabrics is definitely finished product for the manufacturer of such grey fabrics. It is definitely an input for processor who is taking these grey fabrics for further processing. Further, it is noticed that it is not always necessary that this grey fabrics should pass through the hands of the dealer. If the processor had purchased directly from the manufacturer of grey fabrics, the grey fabrics purchased will be undoubtedly and undisputedly an inputs in the hands of the processor. Merely because a dealer has been introduced in between the manufacturer of inputs and the manufacturer of finished goods, the nature of these products as input cannot undergo a change. Notification No. has already envisaged credit not merely for stock with the traders but also in respect of stock lying with the processors.

3. That being the factual and legal situation, we see no reason to take a different view than that of the Tribunal. We, therefore, see no merits in the appeals and the same deserve to be dismissed."


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