2005 (4) TMI 234 - AT - Central Excise

Summary

Issues: Revenue challenging duty liability on samples of yarn and fabrics drawn during manufacturing process.

In this case, the Revenue challenged the order of the Commissioner (Appeals) regarding the duty liability on samples of yarn and fabrics taken during the manufacturing process. The Revenue argued that the samples, even though taken during the manufacturing process, were in a manufactured condition and thus liable for duty. On the other hand, the respondent's representative contended that the samples were taken during the manufacturing process to test the quality of the yarn and fabric, not after the goods reached the finished stage. The representative highlighted that proper records were maintained for these samples, and the Commissioner (Appeals) had previously ruled in their favor on a similar issue. The Revenue did not appeal against the earlier orders of the Commissioner (Appeals), as acknowledged by the Judicial Member.

The Judicial Member considered the arguments presented by both sides and reviewed the Commissioner (Appeals) order in dispute. The Commissioner (Appeals) had previously allowed similar appeals in favor of the appellants, stating that the samples were drawn at the intermediate stage of manufacturing yarn and fabric, accounted for properly, and destroyed after testing. The Judicial Member found that the Commissioner (Appeals) had correctly applied the law based on the facts presented. As there was no material change in the present case that required revision, and the earlier ruling was upheld, the Judicial Member concluded that no duty was chargeable on the samples. Therefore, the appeal by the Revenue was rejected, and the decision of the Commissioner (Appeals) was upheld.