2005 (6) TMI 325 - AT - Central Excise

Summary

Issues:
1. Exemption withdrawal and imposition of duty on texturised yarn.
2. Non-payment of duty on cleared consignments leading to a show cause notice.
3. Interpretation of Notification No. 70/94-C.E., dated 16-3-1994.
4. Applicability of duty rate on texturised yarn cleared on 3-3-1994.
5. Adjudication by the Assistant Commissioner and appeal before the Commissioner (Appeals).
6. Arguments by both sides regarding the retrospective effect of the notification.
7. Decision on the correct construction of the notification and setting aside the order of the Commissioner (Appeals).

Analysis:
1. The case involved the withdrawal of exemption and imposition of duty on texturised yarn from 1-3-1994. The appellants had stock of texturised yarn on this date and cleared consignments without paying duty, leading to a show cause notice for contravention of Central Excise Rules.

2. The Assistant Commissioner adjudicated the case, finding no intention to hide information or illicitly remove goods. The duty amount was confirmed partially, and the show cause notice balance was vacated. The department appealed before the Commissioner (Appeals) who held the texturised yarn as dutiable from 1-3-1994 and applied a duty rate as per Notification No. 70/94 dated 16-3-1994.

3. The Advocate for the appellants argued that the notification aimed to give exemption to stock lying on 1-3-1994 and did not have a retrospective effect. The Revenue representative contended that duty rate applies on the date of removal, i.e., 3-3-1994, as per Rule 9A of Central Excise Rules, 1944.

4. The Tribunal analyzed the notification and concluded that it provided a special dispensation for charging duty in excess of Rs. 3/- per Kg. on texturised yarn in stock as of 1-3-1994. The exemption was not retrospective and applied to all stock cleared by 30-4-1994, irrespective of the clearance date.

5. The Tribunal set aside the Commissioner (Appeals) order, reinstating the Assistant Collector's decision. The correct construction of the notification was emphasized, leading to the disposal of the appeal in favor of the appellants.

6. The judgment highlighted the importance of interpreting notifications accurately and applying duty rates as per the specific provisions, ultimately ensuring a fair and just resolution in excise duty matters.