1990 (6) TMI 185 - AT - Central Excise

Summary

Issues:
- Duty payment at intermediate stage for manufacturing bags
- Interpretation of Jute Manufactures Cess Rules, 1976
- Applicability of previous judgments on cess payment

Analysis:
The case involved an appeal against an order-in-appeal dated 20-6-1984 by the Collector (Appeals), Calcutta, concerning duty payment by M/s. Kamarhatty Co. Ltd., a Jute Manufacturer, for fabric and bags. The Department alleged that duty was not paid at the intermediate stage for fabric used in bag manufacturing, despite payment at the clearance stage. Nine show cause notices were issued, leading to a demand of Rs. 2,48,300.56. The Assistant Collector confirmed this demand, and the appellants appealed to the Collector of Appeals, Calcutta, without success, resulting in the current appeal.

The main contention revolved around whether cess was separately payable on sacking cloth used in making bags after cess payment on cleared bags. The appellant relied on a previous judgment (M/s. Chitavalasah Jute Mills v. Collector of C. Ex.) stating that once cess is paid on cleared bags, no separate cess is warranted on sacking cloth used. The Department argued that the previous case related to a different period (1-5-1984 to 30-9-1984) under the Jute Manufactures Cess Act, 1983. However, the Tribunal examined both the old Cess Act of 1951 and the Cess Act, 1983, and rejected this argument.

After considering the submissions and previous judgments, the Tribunal upheld the appellant's argument, citing the decision in M/s. Chitavalasah Jute Mills case. The Tribunal concluded that no separate cess was required on sacking cloth used for making bags once cess was paid on cleared bags. Therefore, the appeal was allowed, and the impugned order was set aside, granting consequential relief to the appellant.