1991 (6) TMI 138 - AT - Central Excise

Summary

Issues:
Eligibility of cotton yarn waste for exemption from excise duty under Notification No. 95/61.

Detailed Analysis:
The case involved determining the eligibility of cotton yarn waste arising during the weaving stage for exemption from excise duty under Notification No. 95/61. The appellants, engaged in textile manufacturing, had been paying excise duty under a compounded levy scheme that was later abolished. The Department contended that the exemption applied only to waste from the spinning department, not the weaving department. Demands were raised, and the lower appellate authority found one demand time-barred and directed revision of the other demand pending verification of waste inclusion in yarn weight during manufacturing.

Dr. Jois, representing the appellants, relied on a previous Tribunal decision in the case of Shree Yamuna Mills, which extended the benefit of the notification to cotton waste resulting from sizing of yarn, not limited to waste at the spindle point. However, the Department presented three Tribunal decisions interpreting the notification differently, holding that waste arising during weaving is excisable. These decisions, including the Rajkumar Mills case and the New Great Eastern Spinning case, emphasized that the exemption does not cover waste during weaving as it is part of the duty-liable manufacturing process.

The Tribunal, after a detailed discussion, upheld the Department's interpretation, stating that the exemption under Notification No. 95/61 does not apply to waste during weaving. The Tribunal distinguished the Shree Yamuna Mills case, noting the lack of evidence that weaving waste was solely sizing waste. Consequently, the impugned order was upheld, and the appeal was dismissed based on the consistent interpretation of the notification in previous cases like Rajkumar Mills and Shree Balajee Spinning.

In conclusion, the Tribunal found that the exemption from excise duty for cotton yarn waste under Notification No. 95/61 does not extend to waste generated during the weaving process, aligning with previous decisions and dismissing the appeal brought by the appellants seeking exemption for such waste.