Standard Garments Vs. Commissioner of Central Excise

2. the appeal is against the order of the commissioner (appeals) dismissing the appeal for failure to deposit the entire duty demanded from, and penalty imposed on the appellant. in the order impugned before him, the joint commissioner had held that the benefit of exemption contained in notification 4/97 would not be available to the goods polyester mono filament yarn manufactured by the appellant.3. the counsel for the applicant accepts before us that even on the view that the benefit of the notification would not be available, the applicant would be entitled to the benefit of the duty paid on the inputs, polyester chips, used in the manufacture of the yarn. this duty amounts to rs. 3.61 lakhs, broken up into duty paid on four consignments referred to in the statement of the partner of the firm, and sum of rs. 1.04 lakhs which had been reversed when it decided to avail of the exemption. he offers to deposit the remaining amount of rs. 60,000/-.4. the contention of the departmental representative that sub-rule (3) of rule 57e will not permit credit to be taken because the applicant misde-clared the final product is difficult to accept. sub-rule (3) of rule 57e denies credit on the duty paid on inputs where the manufacturer of such inputs has failed to pay duty by resorting to any of the factors specified in the proviso under sub-section (1) of section 11a of the act. that would prima facie not apply to a situation of this kind, even assuming suppression, which itself is debatable.5. accordingly, we allow the appeal and set aside the order of the commissioner (appeals) on the condition that the applicant produces before the commissioner (appeals) evidence of payment of duty of rs. 60,000/-within two months from the receipt of this order. in the event that this condition is not fulfilled, the appeal before us shall stand dismissed.