1991 (8) TMI 210 - AT - Central Excise

Summary

Issues:
1. Interpretation of Cess duty on jute yarn consumed for manufacturing jute products within the same factory.
2. Applicability of Industries (Development and Regulation) Act, 1951 and Jute Manufactures Cess Rules, 1976 on captive consumption of jute yarn.
3. Dispute regarding the payment of Cess duty on jute yarn used for manufacturing jute twine.

Analysis:

Issue 1:
The case involved a dispute over whether Cess duty was payable on jute yarn consumed for manufacturing jute products within the same factory. The Tribunal considered the provisions of the Industries (Development and Regulation) Act, 1951 and the Jute Manufactures Cess Rules, 1976 in determining the liability for Cess duty on such captive consumption. The appellants argued that Cess duty was only payable when the goods were removed outside the factory, not when utilized within the factory for manufacturing purposes.

Issue 2:
The Superintendent of Central Excise issued show cause notices alleging non-payment of Cess duty on jute yarn cleared for captive consumption in the manufacture of jute products. The Assistant Collector of Central Excise confirmed the demands raised, citing the absence of an exemption provision for captive consumption prior to a certain date. The Collector of Central Excise (Appeals) upheld the orders-in-original, emphasizing the payment of Cess duty even for captive consumption within the factory premises before a specific amendment date.

Issue 3:
Regarding the specific issue of jute yarn used for manufacturing jute twine, the Tribunal referred to previous judgments to determine liability for Cess duty. The Tribunal cited precedents where jute yarn consumed in the manufacture of jute twine was held not liable for Cess duty. Consequently, the demand raised against the appellants for jute yarn utilized in manufacturing twine was set aside based on established Tribunal decisions.

Conclusion:
The Tribunal rejected the appeals concerning the levy of Cess on jute yarn used in the manufacture of jute products, citing established precedents. However, it ruled in favor of the appellants regarding the jute yarn consumed in the manufacture of jute twine, aligning with previous Tribunal decisions. The Tribunal dismissed the Reference Application and stay application filed by the appellants, emphasizing the inapplicability of a reference application against its order involving a question related to the rate of duty.