2008 (4) TMI 316 - AT - Central Excise

Exemption - The appellants are engaged in the manufacture of dyeing and printing of cotton man-made fabrics. The appeal has been filed against the order confiscating sarees and confirming demand of Rs. 1,47,006/- on the ground that the goods have been manufactured with the aid of power. From the statement recorded from all the parties concerned, and conclusion arrived at by the lower authorities clearly show that the power has been used for mixing, drying by use of steamager, thus rendering man-made fabrics manufactured by the appellant ineligible for exemption Notification No. 3/2001. The appeal field by the appellant is rejected.

Summary

Issues:
Manufacture of dyeing and printing of cotton man-made fabrics, confiscation of sarees, demand confirmation based on power usage, exemption eligibility under Notification No. 3/2001, classification of fabrics, use of power in processing.

Analysis:
The appellants, engaged in manufacturing cotton man-made fabrics, appealed against the confiscation of sarees and a demand confirmation of Rs. 1,47,006 due to alleged power usage in manufacturing. The Commissioner (Appeals) noted the use of power at the printing stage of processing man-made fabrics, leading to the order against the appellants. The exemption under Notification No. 3/2001 does not apply if fabrics are processed with power, as admitted by the signatory and proprietor regarding the use of steamager and power for drying and mixing colors and cream. The admission statements were not retracted, affirming the power usage.

The Advocate for the respondents detailed the manufacturing process, highlighting that certain processes for cotton fabrics can use power and still be exempted under Notification No. 3/2001. However, the case pertained only to man-made fabrics, as indicated by the seized viscose sarees and clearance without duty payment. Unlike cotton fabrics, man-made fabrics do not have a similar provision for power usage exemption. The lower authorities' findings and statements from involved parties confirmed power usage for mixing and drying man-made fabrics, making them ineligible for the exemption.

The Tribunal, after hearing both parties, upheld the order-in-appeal by the Commissioner (Appeals), rejecting the appellant's appeal. The power usage for mixing and drying man-made fabrics was deemed sufficient to render them ineligible for the exemption under Notification No. 3/2001. The classification of fabrics and the clear indication of power usage led to the dismissal of the appeal.

In conclusion, the judgment focused on the power usage in processing man-made fabrics, the applicability of exemptions under Notification No. 3/2001, and the classification of fabrics to determine eligibility. The findings supported the decision to reject the appeal based on the established power usage for mixing and drying, making the manufactured man-made fabrics ineligible for exemption.