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1974 (11) TMI 94 - HC - Central Excise
Issues involved: Interpretation of Notification No. 47 of 1962 and Notification Nos. 111 and 112 of 1962 u/r 8 of the Central Excise Rules, 1944 regarding excise duty exemption and concessional levy for cotton fabrics manufactured by a cooperative society. Determination of whether the petitioner-society qualifies as an "independent processor" under the notifications due to ownership of a factory in Cuddalore.
Summary: 1. The petitioner, a cooperative society engaged in manufacturing cotton fabrics, claimed excise duty exemption under Notification No. 47 of 1962 for handloom fabrics. Dispute arose regarding the petitioner's status as an "independent processor" under Notification Nos. 111 and 112 of 1962 due to ownership of a factory in Cuddalore where weaving was done. 2. The Assistant Collector of Central Excise issued a notice disqualifying the petitioner from concessional levy, demanding payment of the difference in duty collected. The petitioner contested the levy, citing Rule 10A and limitation as reasons for non-applicability. 3. The court held that Rule 10A was not applicable for the disputed period and the collection of the difference was barred by limitation. 4. The petitioner, having paid duty at the normal rate under protest, claimed the benefit of the notifications. Authorities upheld the disqualification of the petitioner as an "independent processor" due to manufacturing handloom fabrics in Cuddalore. 5. The petitioner argued that their factory in Cuddalore should not disqualify them as an "independent processor" for the Erode unit. The definition of "factory" and "excisable goods" under the Act were crucial in determining the petitioner's eligibility. 6. The court rejected the petitioner's argument that exemption from excise duty removed the classification of goods as "excisable goods." The nature of goods as excisable is based on their classification in the First Schedule, not the actual levy of duty. 7. The court emphasized that the exemption from excise duty did not alter the classification of goods as excisable. The petitioner's claim that exempted goods cease to be excisable was dismissed, upholding the authorities' decision. 8. The writ petition was dismissed, ruling against the petitioner. The court discharged the rule nisi without costs.
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