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2004 (4) TMI 415 - AT - Central Excise
Issues:
Whether duty is payable on the quantity of single cotton yarn represented in the waste during conversion. Analysis: The dispute in this case revolved around the duty liability of the appellants on the waste generated while converting single cotton yarn into cabled, doubled, and multi-folded yarn. The period under consideration was from August 1992 to January 1997. The appellants cleared the cabled, doubled, and multi-folded yarn on payment of duty but did not pay duty on the single yarn. The key issue was whether duty was payable on the waste representing the single cotton yarn during the conversion process. The Tribunal referred to various decisions, including the case of Bhilwara Spinners Ltd., where it was held that duty would not be chargeable again on the single yarn if duty had already been paid at the doubled/multi-folding stage. However, in the case of Bhilwara Synthetics Ltd., it was noted that duty was payable on the single yarn during a specific period, despite exemptions before and after that period. The Tribunal emphasized the need to follow the judgments of the Apex Court and upheld the demand for duty during the disputed period. In analyzing the facts, the Tribunal found the decision in the case of Bhilwara Synthetics Ltd. to be well-reasoned and applicable to the present case. It concluded that duty was not required to be paid before May 20, 1994, or after August 11, 1994. However, duty was payable on the single yarn between May 20, 1994, and August 10, 1994. The Tribunal set aside the previous orders, remanding the matter for the computation of duty liability for the specified period, considering the duty already paid on the converted yarn. The appellants were granted a hearing opportunity, and the penalty imposed was also set aside. In the final decision, the appeals were allowed, and the Tribunal directed the Original Authority to re-calculate the duty liability for the period in question, ensuring a fair opportunity for the appellants to present their case.
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