1988 (8) TMI 234 - AT - Central Excise

Summary

Issues:
Levy of cess on jute yarn captively consumed for manufacturing other jute products, applicability of Central Excise Rules, time-barred demands, exclusion of yarn for levy of cess, classification of jute yarn and jute products under Central Excise Tariff.

Analysis:

1. The appeal was against the levy of cess on jute yarn consumed in the factory for manufacturing products like Hessian and Sacking. The appellant argued that as the finished products discharged the liability, no cess should be imposed on the consumed yarn. The original adjudicating authority confirmed the demands, stating that jute yarn and twine are distinct from jute manufactures, justifying the levy of cess separately. The Collector of Appeals remanded the case for fresh consideration, excluding yarn removed under bond and yarn converted into twine/sacking for cess calculation.

2. The consultant for the appellant contended that some demands were time-barred, questioning the Collector's order for de novo consideration instead of a final decision. The JDR argued against the exclusion of yarn consumed for other products from cess, citing a Tribunal decision. The Tribunal referenced a previous case to differentiate between yarn used for twine and other jute products, ruling that only yarn used for other products is liable for cess.

3. Regarding the time-bar issue, the Tribunal noted a lack of examination and considered the need to assess if a longer time period could apply under Section 11A(1). The Collector's mention of yarn cleared under bond without factual basis required further investigation. The Tribunal remanded the case for a fresh decision by the Collector after addressing these aspects.

4. The Jurisdictional Collector filed a Cross Objection, disputing the classification of jute yarn and products under the Central Excise Tariff, emphasizing the distinction between them. The Collector criticized the Appeals' failure to consider government orders on cess levy and cited a previous case to support cess imposition on consumed jute yarn. The Tribunal disposed of the cross objection in line with its ruling on the main issue, remanding the case for further examination by the lower authority.

5. Ultimately, the Tribunal set aside the lower authority's order and remanded the case for a comprehensive reevaluation, ensuring all aspects, including time-barred demands, exclusion of yarn, and classification issues, are properly addressed in light of the arguments presented.