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2008 (4) TMI 184 - AT - Central ExciseIntermediate product processed wrap & circular knitted cotton fabrics used in the mfg. of cotton hosiery undergarments - intermediary products do not find mention in the annexure to the Not. 8/03 (under which assessee is availing SSI exemption) during the period 1-4-03 to 30-9-03 - since the final products are exempted, the intermediate products would not be entitled for the benefit of Not. 67/95 duty on intermediate products for the period 1-4-03 to 30-9-03 is required to be paid
Issues:
Dutiability of intermediate products under SSI exemption Notification No. 8/2003 and Notification No. 67/95. Analysis: The appeal was filed against Orders-in-Appeal passed by the Commissioner of Customs and Central Excise. The appellants manufactured "cotton hosiery undergarments" under the brand name 'Kunnath' and availed SSI exemption under Notification No. 8/2003. However, they were also manufacturing intermediate product "processed wrap and circular knitted cotton fabrics" chargeable to duty. The Original Authority confirmed duty amount, allowed Cenvat credit on raw material consumed, and imposed a penalty. Both parties appealed to the Commissioner (A) who rejected the appeals. The appellants then approached the Tribunal for relief. The learned JDR argued that since the final products were exempted, the intermediate products would not be entitled to the benefit of Notification No. 67/95, citing relevant legal precedents. The Tribunal carefully reviewed the case records and noted that while the final product was entitled to SSI exemption, the dutiability of the intermediate product was in question. The exemption available to the fabric was withdrawn from 1-4-2003, and the exemption under Notification No. 67/95 would not apply to intermediary products when the final product is exempt or chargeable to nil rate of duty. As the final products were exempted for the first clearances up to a certain value, the exemption under Notification No. 67/95 would not extend to the intermediate products. The Tribunal, in line with the legal position and precedents cited, rejected the appeal and upheld the impugned order. The judgment was pronounced in open court on 15-4-2008 by the Members of the Tribunal.
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