2002 (1) TMI 407 - AT - Central Excise

Summary

Issues:
1. Interpretation of Notification No. 26/94 regarding payment conditions for duty benefit on yarn clearances.
2. Validity of payment received through Demand Drafts instead of cheques by Co-operative Society or Corporation.
3. Applicability of Tribunal judgments on payment modes for duty benefit eligibility.

Issue 1: Interpretation of Notification No. 26/94
The judgment concerns a revenue appeal against a Commissioner's decision granting duty benefit under Notification No. 26/94 for the clearances of cotton yarn and non-cellulosic spun yarn. The dispute arose as the assessee received payment for goods through Demand Drafts, while the notification seemingly required payment by cheques. The Commissioner (Appeals) accepted the assessee's argument that they were registered as a Handloom Development Corporation and incorporated under the Company's Act, allowing payment via Demand Drafts, cheques, or Letter of Credit. The Commissioner relied on the Tribunal's judgment in the Baripada Spinning Mills case to support this interpretation.

Issue 2: Validity of Payment Mode
The revenue contested the payment mode, arguing that the notification explicitly mandated payment by cheques drawn by the Co-operative Society or Corporation, not through Demand Drafts. The revenue asserted that as this condition was not met, the order should be set aside. However, the consultant for the respondent referenced various Tribunal judgments, including Assam Cotton Mills, Shree Bhawani Cotton Mills, and Modern Syntex (India) Ltd., to support the contention that payment through Demand Drafts was in substantial compliance with the notification's requirements.

Issue 3: Applicability of Tribunal Judgments
The Tribunal analyzed the issue raised in the appeal, focusing on whether the benefit of the notification could be granted if payment for yarn was received by means other than cheques drawn by the Co-operative Society or Corporation. The Tribunal referred to the Baripada Spinning Mills case and subsequent judgments like Shree Bhawani Cotton Mills, emphasizing that payment through Demand Drafts or Pay Order could fulfill the notification's conditions if obtained by issuing a cheque on the registered co-operative society's account. The Tribunal, following the consistent view from previous judgments, rejected the revenue's appeal, upholding the validity of payment through Demand Drafts as compliant with the notification's requirements.

In conclusion, the Appellate Tribunal upheld the Commissioner's decision, emphasizing the interpretation of the notification's payment conditions, the validity of payment modes, and the applicability of previous Tribunal judgments in determining duty benefit eligibility for yarn clearances.