1996 (2) TMI 237 - AT - Central Excise

Summary

Issues:
1. Interpretation of the stage of payment of Central Excise duty for blended wool tops under Item No. 43 of the old Central Excise Tariff.

Detailed Analysis:

The appeal before the Appellate Tribunal CEGAT, New Delhi involved the consideration of the stage at which Central Excise duty should be paid for blended wool tops falling under Item No. 43 of the old Central Excise Tariff. The appellant, M/s. VXL India Ltd., manufactured wool tops with 100% wool and blended tops containing wool along with viscose and polyester. The dispute arose regarding the payment of excise duty on these blended tops. The appellant argued that duty should be paid based on the weight of the pure wool top stage, while the Department contended that duty should be paid at the stage of clearances when the wool and polyester/viscose content entered the wool top.

During the hearing, the appellant's counsel referred to an amendment in Rule 9 and contended that when pure wool tops were removed to produce blended wool tops, it constituted a removal stage attracting excise duty. The Tribunal examined the Tariff Entry covering all types of wool tops where wool content was predominant. The counsel also cited a Supreme Court decision regarding the liability to pay duty at an intermediate stage. However, the Tribunal distinguished the facts of the present case from the cited decision, emphasizing that the continuous manufacturing process of wool tops did not involve an intermediate stage for producing other commodities.

The Tribunal relied on its previous decision in the case of British India Corporation Ltd. v. Collector of Central Excise, Chandigarh, where it was held that excise duty was chargeable at the time of removal of excisable goods, rejecting the 'Earliest Stage' theory for chargeability under Central Excise Rules. The Tribunal quoted a specific paragraph from the earlier decision to support its reasoning, emphasizing that the word "Consumption" in Rule 9(1) did not apply to captive use scenarios like the production of blended wool tops. The Tribunal concluded that the appellant's appeal lacked merit and was therefore rejected after considering all relevant aspects of the case.