1998 (3) TMI 269 - AT - Central Excise

Woven sacks being manufactured out of fabrics woven on circular looms benefit of Notification No. 223/86-C.E.,

Summary

Issues:
Interpretation of exemption notification for woven sacks manufactured on circular looms.

Detailed Analysis:
The case involved three appeals filed by a company manufacturing High Density Polythylene Bags on Circular Looms, seeking exemption under Notification No. 223/86-C.E. The central issue was whether the sacks manufactured on circular looms were eligible for the exemption. The appellate authority ruled that the sacks were indeed manufactured on circular looms, thus not qualifying for the exemption.

The appellant argued that the fabric produced on circular looms was not sacks and cited a Board's circular to support their claim. They contended that the circular fabric needed to be stitched to become a sack. However, the respondent emphasized that the fabric for the sacks was made on circular looms, making them ineligible for the exemption.

The Tribunal analyzed the exemption notification and the Board's circular. It noted that the woven sacks made from fabric on circular looms fell under the proviso of the notification, disqualifying them from the exemption. The Tribunal also referenced a previous decision involving similar circumstances to support its conclusion.

The appellant highlighted an amendment to the notification but the Tribunal maintained that even without the amendment, sacks made on circular looms did not qualify for the exemption. The Tribunal stressed that the interpretation should align with the purpose of the notification, emphasizing that circular looms produced circular fabrics, making the product ineligible for the exemption.

Lastly, the appellant raised concerns about discrimination and non-payment of excise duty by other manufacturers. However, the Tribunal focused on the interpretation of the proviso, concluding that sacks manufactured from circular fabric were not entitled to the exemption. Consequently, the Tribunal upheld the Collector of Central Excise (Appeals) decision, rejecting all three appeals.