2009 (1) TMI 839 - AT - Central Excise

Summary

Issues:
Challenge to Demand Notice for textile cess liability based on classification as processors, liability of job workers as manufacturers, applicability of Circular No. 55(2)/73-AC, interpretation of Circular dated 14-11-1984, burden of proof for cess payment exemption.

Analysis:
The Appellants contested the Demand Notice for textile cess, arguing they are processors, not liable for cess as they are job workers only. They emphasized that the processed fabric they clear is not the end product, citing Circular No. 55(2)/73-AC's list of eligible goods. The Appellants relied on a case law but did not submit it. They sought to quash the Demand Notice, claiming it is not maintainable due to the Circular's clarification. The Respondent countered, asserting job workers are textile manufacturers, citing legal precedents. The Respondent highlighted a Constitutional Bench Judgment and other case laws supporting their stance, maintaining that processors are liable for cess. They mentioned a Show Cause Notice issued before the Demand Notice and argued the Appeal lacks merit.

Upon review, the Tribunal examined the Circular dated 14-11-1984, which specifies that processing factories doing job work are liable for cess unless proof of prior payment is provided. The Tribunal noted the Appellants' case aligns with this Circular, but the burden of proof lies with them to show prior cess payment by the supplier. As the Appellants failed to demonstrate such payment, they are deemed liable for the cess. The Tribunal concluded that the Appellants qualify as textile manufacturers and are thus obligated to pay the cess. Consequently, the Appeal was dismissed for lacking merit, albeit without costs.