1981 (3) TMI 243 - Board - Central Excise

Summary

Issues:
Whether the appellants manufactured fibre without the necessary Central Excise license and payment of duty.

Analysis:
The appeal was filed against an Order-in-Original passed by the Collector of Central Excise, Chandigarh. The appellants were accused of manufacturing polyester fibre from polyester crimped uncut waste without the required license and without fulfilling Central Excise formalities, including duty payment. The case revolved around the process undertaken by the appellants, which the Department considered as manufacturing fibre from waste. The advocate for the appellants referenced a Board ruling to support their argument. The ruling clarified the classification of wastes arising during the manufacture of polyester fibre and yarn. It distinguished between pre-drawn waste and post-drawn waste, emphasizing the excisability of waste at the post-drawn stage as fibre. The advocate argued that post-drawn waste had been treated as fibre by the Department, leading to potential double taxation under the same Tariff Item 18B.

The Board carefully evaluated the facts, submissions, and arguments presented. The central issue was whether the appellants had indeed manufactured fibre without the necessary license and duty payment. It was acknowledged that the appellants had obtained polyester waste from a specific source, with the quantity not in dispute. The Board accepted that post-drawn waste, processed by the appellants, should be treated as fibre due to its characteristics and classification under Notification No. 53/72-C.E. This waste was allowed to be cleared at concessional rates as per the notification. Considering that the waste was cleared as fibre, imposing duty under Tariff Item 18B would result in unwarranted double taxation, which was deemed inappropriate under the law.

Ultimately, the Board agreed with the appellants' argument and allowed the appeal. The decision was based on the understanding that post-drawn waste, treated as fibre and cleared at concessional rates, should not be subjected to additional duty under the same Tariff Item, avoiding double taxation.