1987 (8) TMI 192 - AT - Central Excise

Summary

Issues:
1. Condonation of delay in filing appeals.
2. Refund of excise duty on cotton yarn converted into plain reel hanks.
3. Interpretation of Central Excise Tariff Notification No. 131/77.
4. Application of Central Excise Rules 51A and 173H.
5. Deferment of payment of duty under Rule 49A.
6. Comparison with previous tribunal decisions.

Analysis:
1. The judgment begins by addressing the issue of condonation of delay in filing appeals by M/s. Jiyajee Rao Cotton Mills. The delay was attributed to the misplacement of the impugned order and the illness of the official concerned. Despite opposition from the Department, the delay was condoned based on the circumstances explained.

2. The main issue in all appeals is the refund of excise duty on cotton yarn converted into plain reel hanks. The appellants claimed refund based on Central Excise Tariff Notification No. 131/77, which exempted duty on such hanks. The Department rejected the claims, stating that once goods were cleared for consumption, no refund could be entertained for unutilized yarn.

3. The Tribunal analyzed whether the exemption under Notification No. 131/77 applied to yarn converted into hanks after payment of duty. It was noted that hanks were exempt regardless of the duty paid on the constituent yarn. The Tribunal also discussed the applicability of Central Excise Rules 51A and 173H, which did not provide for refund of duty already paid.

4. The judgment delves into the deferment of duty payment under Rule 49A and the contention that duty should not be paid on unutilized yarn at the weaving stage. Previous tribunal decisions were cited to support the arguments, but the Tribunal found that the duty paid on yarn removed from the spinning section was not eligible for refund.

5. A comparison with a previous case involving Orissa Weavers Cooperative Spinning Mills highlighted the distinction between duty liability at different stages of yarn production. The Tribunal concluded that the duty paid on yarn cleared for weaving was not refundable based on the form in which it was ultimately cleared.

6. The judgment concludes by upholding the impugned orders and dismissing the appeals filed by M/s. Jiyajee Rao Cotton Mills. However, in the appeal filed by the Collector of Central Excise, Indore, the order of the Collector (Appeals) favoring the assessee was set aside based on the discussions and findings in the other appeals.