2018 (2) TMI 73 - AT - Central Excise

Additional Excise Duty (AED) - bleached cotton fabrics - appellant engaged in the manufacture of plastic coated fabrics - Held that - on the same set of facts for a different period, identical issue was before the Tribunal in assessee s own case, Siddeshwar Textile Mills Pvt. Ltd. v. Commissioner of Central Excise, Pune III 2009 (4) TMI 752 - CESTAT, MUMBAI , where it was held that As the additional duty of excise leviable under Additional Duties of Excise (Goods of Special Importance) Act, 1957 was not covered under the said Notification, non payment of additional excise duty by the appellants is incorrect - appeal allowed - decided in favor of appellant.

Summary

Issues:
Additional excise duty on bleached cotton fabrics for a manufacturer of plastic coated fabrics.

Analysis:
The appeals were filed against Order-in-Appeal No: 060 to 061/2007 for the period of March 1999 to August 2000 and September 2001 to December 2001. The issue revolved around the additional excise duty on bleached cotton fabrics for a manufacturer engaged in producing plastic coated fabrics. Both parties were represented by their respective advocates. The Tribunal noted that a similar issue was previously addressed in Siddeshwar Textile Mills Pvt. Ltd. v. Commissioner of Central Excise, Pune III, where it was observed that the duty confirmed was essentially paid by the appellants through the PLA towards the AED on the coated fabrics, resulting in revenue neutrality. This point was raised by the appellants in their reply to the show cause notice and appeal before the Commissioner (Appeals), which the lower authorities did not rebut.

The Tribunal referred to various case laws, including CCE v. Textile Corporation of Marathawada, highlighting that if duty is paid at each stage of manufacturing, it should be available as credit for subsequent stages to maintain revenue neutrality. The Tribunal emphasized that the demand on the intermediate stage was not sustainable when duty was paid at the final stage. Citing precedents like CCE v. Narayan Polyplast, CCE v. Narmada Chematur, and CCE v. Coca-Cola India, the Tribunal reiterated that where the demand equals the credit available to the assessee, the demand is not tenable. The Tribunal also mentioned cases like CCE v. Dharampal Satyapal and CCE v. Kulavi Tobacco Industry, where demands were set aside due to the availability of credit and revenue neutrality.

Ultimately, the Tribunal granted relief to the appellant based on the principle of revenue neutrality. The jurisdictional High Court upheld the order, and considering the aspect of revenue neutrality, the impugned order was set aside, and both appeals were allowed. The decision was dictated and pronounced in the open court by Justice Dr. Satish Chandra.