1996 (8) TMI 335 - AT - Central Excise

Summary

Issues: Interpretation of Rule 49A regarding duty payment on spun yarn and inclusion of 'Dharmada' value in finished products.

In the judgment delivered by the Appellate Tribunal CEGAT, New Delhi, the two main issues revolved around the interpretation of Rule 49A concerning the payment of duty on spun yarn and the inclusion of 'Dharmada' value in finished products. The appellant's representative argued that the duty on cellulosic spun yarn should be paid at the appropriate rate plus an additional 1.5% as per Rule 49A(1) and (2). The department contended that shearing constitutes processing under Rule 49A(2), requiring a higher duty rate of 3%. The appellant relied on a Supreme Court decision stating that fabrics remain unprocessed even after shearing. The department also argued for the inclusion of 'Dharmada' value in the finished products to increase their assessed value.

Upon careful consideration of the arguments, the Tribunal referred to the Supreme Court decision cited by the appellant, affirming that fabrics are deemed unprocessed under Rule 49A even post shearing. Consequently, the Tribunal ruled that the duty on the yarn in question should be paid at the appropriate rate plus 1.5%, in line with Rule 49A(1). The Tribunal declined to delve into the 'Dharmada' issue as it was deemed inconsequential by the Adjudicating Authority. As a result, the appeal was disposed of, upholding the appellant's plea regarding the duty payment on the spun yarn and refraining from addressing the 'Dharmada' value inclusion in the finished products.