1988 (1) TMI 231 - AT - Central Excise

Summary

Issues:
- Liability of Central Excise duty on goods cleared without payment
- Challenge to the Collector's order by the appellants
- Amendment of Memorandum of Appeal by the appellants
- Exemption under Notification No. 80/76-C.E., dated 16-3-1976
- Arguments presented by both parties
- Interpretation of the Notification No. 80/76-C.E., dated 16-3-1976

Analysis:

The judgment involves a case where the Collector of Central Excise, Jaipur held that goods cleared by the appellants were liable to Central Excise duty but were cleared without payment, leading to the imposition of duty and a penalty. The appellants challenged this order, claiming exemption under Notification No. 80/76-C.E., dated 16-3-1976, for the activity of stentering carried out by them during a specific period. The appellants sought to amend their Memorandum of Appeal to include grounds supporting their exemption claim. The Tribunal allowed the amendments, permitting the appellants to assert their exemption under the said notification.

During the hearing, the appellants argued that their stentering activity qualified for exemption under Notification No. 80/76-C.E., dated 16-3-1976, which exempted cotton fabrics from central excise duty when subjected to the finishing process of stentering. The appellants contended that the Collector's order should be set aside based on this exemption. On the other hand, the J.D.R. supported the Collector's findings and requested a remand to consider the impact of the notification, which was allegedly not taken into account by the lower authority.

Upon review, the Tribunal examined the provisions of Notification No. 80/76-C.E., dated 16-3-1976, which exempted cotton fabrics processed through stentering from central excise duty. The Collector's observations indicated that the appellants processed fabrics falling under a specific category eligible for exemption. Consequently, the Tribunal concluded that Central Excise duty was not applicable to the processed fabrics from 16-3-1976 onwards. As a result, the impugned order of the Collector was set aside, and the appeal by the appellants was allowed based on the exemption provided under the notification.

In summary, the judgment focused on the interpretation and application of Notification No. 80/76-C.E., dated 16-3-1976, to determine the liability of Central Excise duty on goods cleared without payment. The Tribunal's decision to allow the appeal was based on the finding that the appellants' stentering activity fell within the scope of exemption under the said notification, leading to the reversal of the Collector's order and the penalty imposed.