2004 (2) TMI 430 - AT - Central Excise

Summary

Issues Involved:
1. Challenge against common order passed by the Commissioner (Appeals) regarding liability to pay Jute Cess on Gunny Bags with Hessain Cloth.
2. Interpretation of conflicting views by different Benches on the liability of Jute Cess on jute bags made from jute fabrics.

Issue 1: Challenge against Common Order by Commissioner (Appeals)
The appellants contested the liability to pay Jute Cess on Gunny Bags with Hessain Cloth, arguing that as they did not use jute fiber as an input in manufacturing, they should not be obligated to pay the cess. They also claimed that the Cess on jute was not a multiple tax. However, the authorities below did not accept these contentions, leading to the appeal challenging the common order issued by the Commissioner (Appeals) on 12-5-2000.

Issue 2: Interpretation of Conflicting Views by Different Benches
The Tribunal noted conflicting decisions by different Benches on the issue of Jute Cess liability on jute bags made from jute fabrics. The Eastern Bench in the case of CCE v. Consolidated Builders & Developers (P) Ltd. held that hessian bags and sacking bags made from jute fabrics would attract Jute Cess. In contrast, the Northern Bench in another case stated that the conversion of jute fabrics into jute bags did not constitute manufacture, thus exempting them from the cess. Subsequently, the Eastern Bench in Naffar Chandra Jute Mills v. CCE, Calcutta-II, concluded that the duty of cess applied to hessian bags and sacking bags. Due to these conflicting views, the Tribunal referred the issue to a Larger Bench to determine whether hessian bags and sacking bags made from jute fabrics and fabrics on which cess was paid should be further liable to cess under the Jute Manufactures Cess Act, 1983, along with the Jute Manufactures Cess Rules, 1984.