2004 (3) TMI 217 - AT - Central Excise

Summary

Issues Involved:

1. Entitlement to the benefit of exemption Notification Nos. 6/2000-C.E., dated 1-3-2000 and 3/2001-C.E., dated 1-3-2001.
2. Whether the two manufacturing units should be considered as separate or a single unit for the purpose of Central Excise registration.
3. Validity of the earlier Order-in-Appeal regarding single registration.
4. Application of the principle of res judicata in quasi-judicial proceedings.
5. Calculation of duty and eligibility for Modvat credit.
6. Imposition of penalty.

Detailed Analysis:

1. Entitlement to the Benefit of Exemption Notifications:

The primary issue in the appeals was whether the appellants were entitled to the benefit of exemption Notification Nos. 6/2000-C.E. and 3/2001-C.E. The authorities denied the benefit, confirming the demands of duties and imposing penalties on the appellants. The notifications granted exemption to Textured Yarn manufactured by an independent Texturizer who does not have facilities for processing Partially Oriented Yarn (POY) of Polyester.

2. Whether the Two Units Should Be Considered as Separate or Single Unit:

The appellants had two manufacturing units in different villages, Dahali and Rahadi. Initially, they argued that both units were a single entity, requiring only one registration. This contention was accepted by the Commissioner (Appeals) in an Order-in-Appeal dated 18-11-1998. However, following new budgetary provisions in 2000, the appellants sought separate registrations for the two units, which were granted but later challenged by the Revenue.

3. Validity of the Earlier Order-in-Appeal:

The Commissioner (Appeals) had earlier ruled that both units were one and the same, requiring only a single registration. This order was not challenged by either party and thus attained finality. The appellants' subsequent claim that the units were separate was seen as contradictory to their earlier stance.

4. Application of the Principle of Res Judicata in Quasi-Judicial Proceedings:

The Tribunal held that the principle of res judicata applied, precluding the appellants from taking a different stand in subsequent proceedings. The earlier decision by the Commissioner (Appeals) was binding unless there were significant changes in facts or new evidence, which was not the case here.

5. Calculation of Duty and Eligibility for Modvat Credit:

The Tribunal acknowledged that the benefit of Modvat credit and the consideration of total realization as cum-duty price should be extended to the appellants. The matter was remanded to the original adjudicating authority to re-calculate the duty, allowing the appellants to present relevant documents supporting their Modvat credit claims.

6. Imposition of Penalty:

The Tribunal set aside the imposition of personal penalties on the appellants, noting that the dispute was bona fide and involved interpretation of notifications, with no suppression of facts by the appellants.

Conclusion:

The Tribunal upheld the denial of the exemption benefits, treating the two units as one based on the principle of res judicata. However, it remanded the matter for re-calculation of duty, allowing Modvat credit and cum-duty price considerations. The penalties imposed were set aside, recognizing the bona fide nature of the dispute.