2000 (7) TMI 140 - AT - Central Excise

Summary

Issues:
1. Duty liability on cotton yarn converted into cone.
2. Exemption claim for terry towels manufactured.
3. Denial of exemption for terry towels by Collector (Appeals).

Analysis:
1. The first issue pertains to the duty liability on cotton yarn converted into cone, confirmed by the Collector of Central Excise. The duty amount was specified, and a penalty was imposed. The Revenue's appeal challenged the duty exemption granted under Notification No. 65/87, arguing that the towels did not qualify as made-up articles due to stitching operations. The Advocate for the assessee referenced a previous Tribunal decision supporting the exemption for terry towelling fabrics. The Tribunal upheld the duty exemption based on the product's characteristics and classification under Chapter 63 of the Tariff Act, rejecting the Revenue's appeal and allowing the assessee's appeal.

2. The second issue involves the denial of exemption for terry towels by the Collector (Appeals). The Revenue argued against the exemption based on the interpretation of the Tariff Act and classification of the product. The Advocate for the assessee relied on a previous Tribunal decision supporting the exemption for terry towelling fabrics. The Tribunal, after careful consideration, found that the product, despite certain alterations, remained classifiable under Chapter 63 of the tariff. Consequently, the Tribunal rejected the Revenue's appeal and allowed the assessee's appeal, granting consequential relief as per law.

3. The third issue focuses on the denial of exemption for terry towels by the Collector (Appeals). The Revenue contested the exemption based on specific provisions of the Tariff Act. The Advocate for the assessee referenced a previous Tribunal decision supporting the exemption for terry towelling fabrics. The Tribunal analyzed the product's characteristics and classification under the Tariff Act, ultimately upholding the duty exemption and allowing the assessee's appeal while rejecting the Revenue's appeal and cross-appeal.

In conclusion, the Tribunal's detailed analysis of the issues surrounding duty liability and exemption for terry towels resulted in the rejection of the Revenue's appeals and the allowance of the assessee's appeals with consequential relief as per law.