1998 (10) TMI 148 - AT - Central Excise

HDPE sacks manufactured out of fabric produced on circular looms not entitled to benefit of Notification No. 223/86-C.E.

Summary

Issues:
1. Interpretation of Notification No. 223/86-C.E. regarding exemption for HDPE sacks manufactured from circular looms fabric.
2. Validity of refund claims for the period prior to the amendment made by Notification No. 57/90.

Analysis:
1. The primary issue in this case is the interpretation of Notification No. 223/86-C.E. regarding the exemption for HDPE sacks manufactured from circular looms fabric. The appellants argued that since they manufactured sacks using stitching and cutting machines, and not circular looms, they should be entitled to the exemption. They contended that the notification only excluded sacks manufactured on circular looms, not those made from circular fabric. However, the Revenue's representative argued that the intention of the notification was clear - to exclude sacks made from fabric produced on circular looms. The representative emphasized that looms only produce fabric, not the sacks themselves. The appellants also cited an amendment made in 1990, adding an explanation that sacks made from fabric woven on circular looms would be deemed to have been woven on such looms. The appellants claimed that this supported their case for entitlement to the exemption.

2. The second issue pertains to the validity of the refund claims filed by the appellants for the period before the 1990 amendment. The Revenue's representative argued that the 1990 amendment was clarificatory in nature and supported the Revenue's interpretation of the original notification. The representative emphasized that the clarification was necessary to prevent rendering the proviso to the notification nugatory. The Tribunal, after considering the arguments presented, agreed with the Revenue's representative. The Tribunal found that the 1990 amendment was clarificatory and supported the Revenue's position. Consequently, the Tribunal dismissed the appeals, upholding the lower authorities' rejection of the refund claims.

In conclusion, the Tribunal's judgment focused on the interpretation of Notification No. 223/86-C.E. regarding the exemption for HDPE sacks manufactured from circular looms fabric. The Tribunal found that the intention of the notification was to exclude sacks made from fabric produced on circular looms from the exemption. The Tribunal also considered the 1990 amendment, deeming sacks made from fabric woven on circular looms to be included in the exclusion. Ultimately, the Tribunal dismissed the appeals, upholding the lower authorities' decision to reject the refund claims based on the interpretation of the notification and the clarificatory nature of the 1990 amendment.