2007 (11) TMI 196 - AT - Central Excise

Polyester texturised yarn cleared to sister unit for job work - Noti. 214/86 was amended to exclude polyester filament yarn from the purview of job work - no valid grounds have been adduced to show that goods celared under Rule 4(5)(a) was irregular - general provision permitting such clearances under Rule 4(5)(a) has not been amended to exclude polyester twisted yarn - decision of the Commissioner (Appeals) vacating the confiscation and setting aside the penalty is legal and proper

Summary

Issues: Department's appeal against Commissioner (Appeals) order, Exclusion of polyester filament yarn from job work, Confiscation of polyester twisted yarn, Application of Rule 4(5)(a), Appeal by the Department

In this case, the Department filed an appeal against the order of the Commissioner (Appeals) related to the exclusion of polyester filament yarn from job work. The issue arose when officers found that the respondent was undertaking job work of twisting with polyester texturised yarn received from another unit. The original authority confiscated the polyester twisted yarn but allowed redemption upon payment of a fine and imposed penalties. The Commissioner (Appeals held that although job work facility was excluded for polyester twisted yarn, the respondent availed the facility under Rule 4(5)(a) and allowed the appeal. The Department, dissatisfied with this decision, filed an appeal.

Upon hearing the arguments, the Member (T) noted that the goods were permitted to be cleared under Rule 4(5)(a) by one unit for processing by another unit. It was observed that the general provision allowing such clearances under Rule 4(5)(a) had not been amended to exclude polyester twisted yarn. Therefore, the decision of the Commissioner (Appeals) to vacate the confiscation and set aside the penalty was deemed legal and proper. Consequently, the appeal by the Department was rejected, and the Cross-objection was disposed of. The judgment underscores the importance of interpreting relevant rules and notifications in determining the legality of actions taken in relation to job work processes involving specific types of goods.