1992 (3) TMI 315 - AT - Central Excise

Summary

Issues:
Appeal against order dated 17-1-85 by Collector of Central Excise (Appeals), Bombay filed by Collector of Central Excise, Thane and M/s. Raymond Woollen Mills regarding refund claim under Notification No. 237/76 for set off on grey woollen yarn.

Analysis:
The case involved M/s. Raymond Woollen Mills manufacturing worsted woollen hand knitting yarn and receiving duty paid grey woollen yarn under Rule 56A. The issue arose from a notification exempting excise duty on worsted hand knitting yarn in excess of 20% adv, subject to conditions. The Assistant Collector approved the classification list only for stock in RG 1 register, leading to a series of appeals and orders. The party filed a refund claim based on set off, but failed to provide evidence of duty paid wool tops for yarn manufactured. The Collector (Appeals) initially allowed the refund, but subsequent orders rejected it due to lack of proof. The Collector (Appeals) finally held that the refund for P.L.A. debits may be granted as the notification did not restrict set off on grey or processed yarn.

The appellant Collector contended that M/s. Raymond Mills did not fulfill the conditions for set off under Notification 237/76 as they failed to prove the yarn was manufactured from duty paid wool tops. The party argued that they sent duty paid wool tops to job workers for spinning grey yarn, making the processed yarn eligible for set off. They also cited case law supporting cash refunds for set off. The Tribunal considered both arguments and analyzed the notification's requirement that yarn be manufactured from duty paid wool tops to claim set off. The Assistant Collector had found that the yarn in stock was made from duty paid grey yarn, not wool tops, based on evidence. The Tribunal upheld the denial of set off, emphasizing the need to satisfy the proper officer of manufacturing from duty paid wool tops. The previous orders and High Court directions were also taken into account in dismissing the appeal and cross objections.

In conclusion, the Tribunal set aside the Collector (Appeals) order, allowed the Department's appeal, dismissed M/s. Raymond's appeal, and disposed of the Cross Objections accordingly. The decision was based on the failure to prove the yarn was manufactured from duty paid wool tops as required by the notification for claiming set off.