2013 (1) TMI 27 - AT - Central Excise

Waiver of pre-deposit - Captive consumption - marketability - Excise duty, interest and penalty - Assessee engaged in the manufacture of Jute backed Floor Coverings - Jute backed Floor Coverings are exempted from the payment of duty - Applicants were clearing non-woven fabric in the market as well as captively consumed in the manufacture of exempted Floor Covering Revenue argued that captively consumed goods i.e. non-woven fabrics is known in the market as non-woven fabric and the same is sold by the applicant in the market as non-woven fabric Assessee contended that non-woven fabric which is cleared in market is different from the fabric which is captively consumed and the same is not marketable as such, hence it is not excisable Held that - As the goods captively consumed and sold in the market having different dimensional stability, the applicant has made out a prima facie strong case for waiver of pre-deposit. Stay granted

Summary

Issues:
- Waiver of pre-deposit of duty, interest, and penalty for the manufacture of non-woven fabric
- Liability of duty on goods captively consumed in the manufacture of exempted Floor Covering
- Marketability of non-woven fabric captively consumed
- Appeal process and remand orders leading to the present impugned order
- Different dimensional stability of goods captively consumed and sold in the market

Analysis:
The appellant sought waiver of pre-deposit of duty, interest, and penalty amounting to Rs.1,62,33,344 for manufacturing non-woven fabric, which is an intermediate product used in the manufacture of exempted Floor Covering. The Revenue contended that the goods captively consumed, i.e., non-woven fabric, are known in the market and sold as such, making them liable for duty despite the final product being exempted. The adjudicating authority noted that the fabric sold had enhanced dimensional stability, a key factor in textile quality, while the fabric captively consumed differed in this aspect. The appellant argued that the captively consumed fabric was not marketable and relied on previous appeal proceedings and remand orders to support their case for waiver.

The Tribunal considered the definition of 'dimensional stability' from Fairchild's Dictionary of Textiles, emphasizing the fabric's ability to retain shape and size after wear and cleaning. Given the difference in dimensional stability between the captively consumed and market-sold fabric, the Tribunal found a prima facie strong case for waiving the pre-deposit requirement. Consequently, the Tribunal granted the waiver, allowing the appeal to proceed without pre-deposit and staying the recovery during the appeal's pendency. Notably, the Tribunal directed the Registry to schedule the final hearing promptly due to the substantial duty amount and the appeal's vintage from 1991-2002.

In conclusion, the judgment addressed the waiver request for duty pre-deposit concerning non-woven fabric manufacturing, the distinction in dimensional stability between captively consumed and market-sold fabric, and the procedural history leading to the current impugned order. The decision to grant the waiver was based on the fabric's quality differences, supporting the appellant's claim of non-marketability for captively consumed fabric. The Tribunal's directive for expedited final hearing underscored the significance of the case's duty amount and historical context.