1988 (10) TMI 224 - AT - Central Excise

Summary

Issues:
1. Whether duty on pack sheets used in packing jute manufactures exported on Bond is admissible as drawback or refund.
2. Whether the Appellate Collector's order granting rebate on duty paid pack sheets is legal and proper.
3. Whether the pack sheets used for covering other jute fabrics are dutiable under Central Excise Duty.
4. Whether the Appellate Tribunal's decision in a similar case applies to the present appeal.

Analysis:
1. The appeal was filed by the Collector of Central Excise, Calcutta regarding the demand of duty on pack sheets used in packing jute manufactures exported on Bond. The Appellate Collector had allowed the appeal, directing the refund of duty demanded as a drawback. The Government of India reviewed this order and tentatively concluded that no refund of duty on pack sheets is admissible. A show cause notice was issued to the respondent company under Section 36(2) of the Central Excises & Salt Act, 1944.

2. The respondent contended that pack sheets are jute fabrics falling under the Central Excise Tariff, used for covering other jute fabrics, and should be treated at par for export purposes. They argued that the Appellate Collector's order was legal, proper, and that the demand was barred by limitation. The Tribunal noted that duty paid on pack sheets can be refunded by the Central Excise Department, but no existing provisions allowed for such refund.

3. During the appeal, the Departmental Representative argued that the Appellate Collector's order was erroneous and legally unsustainable. However, the Respondent's advocate contended that the order was proper and legal, citing a previous Tribunal decision. The Tribunal dismissed the appeal, stating that the issue was already settled in a previous case involving jute pack sheets and twine used in packing jute manufactures for export.

4. The Tribunal referenced the previous decision where it was held that pack sheets used for packing jute manufactures for export should be treated as part of the manufactured product. The Tribunal concluded that the pack sheets and twine used in preparing the bags for export should be considered as part of the manufactured product and thus not subject to duty liability. Therefore, the Tribunal rejected the appeal based on the precedent set by the previous decision.

In conclusion, the Tribunal upheld the decision of the Appellate Collector, ruling that duty on pack sheets used in packing jute manufactures exported on Bond is not admissible and should be refunded as a drawback. The Tribunal found that the pack sheets used for covering other jute fabrics were not dutiable under Central Excise Duty based on the precedent established in a previous case.