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Judgment
K.S. Radhakrishnan, C.J.—Heard learned Counsel for the Revenue.
The following substantial questions of law arise for our consideration.
(1) Whether, in the facts and circumstances of the case, the CESTAT 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. 35/2003-C.E. (N.T.), dated 10-4-2003 and without considering the Rule 2(g) read with provisions of Rule 9(A) of the CENVAT Credit Rules, 2002?
(2) Whether, in the facts and circumstances of the case, the CESTAT is justified in allowing the transitional credit to the dealer without filing the declaration of stock as on 1-4-2003 under Rule 9(A) of the CENVAT Credit Rules, 2002 when there was a mandatory condition for availing of transitional credit.
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. 35/2003-C.E. (N.T.) 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. 35/03 has already envisaged credit not merely for stock with the traders but also in respect of stock lying with the processors.
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.
The Tax Appeals stand dismissed.