1999 (12) TMI 264 - AT - Central Excise

Summary

Issues:
1. Whether unscoured Woollen Yarn manufactured by M/s. Shakti Spinners is leviable to excise duty.

Analysis:

The appeal filed by M/s. Shakti Spinners raises the issue of whether unscoured Woollen Yarn manufactured by them is subject to excise duty. The Appellant's representative argued that the unscoured yarn was not marketable and therefore not liable to duty. They emphasized that the burden of proving marketability lies with the Department, citing relevant case law. Additionally, they contended that as the yarn was manufactured before the imposition of duty, it should not be subject to duty. They relied on precedents such as Wallace Flour Mills Co. v CCE and CCE v. Vazir Sultan Tobacco Co. to support their position.

The Respondent's representative countered by asserting that unscoured Woollen Yarn is marketable and hence subject to excise duty. They argued that the goods were capable of being brought to the market for sale, as evidenced by their clearance to other job workers for scouring. Furthermore, they claimed that Woollen Yarn was chargeable to excise duty even before a specific date, albeit at a nil rate, making it liable for duty as per the prevailing rate at the time of clearance.

Upon considering the arguments from both sides, the Tribunal noted that excise duty is leviable on manufactured and marketable goods. It was established that the Appellants had manufactured the yarn and sent it for scouring, indicating its marketability. The burden of proving non-marketability was on the Appellants, which they failed to discharge. The Tribunal rejected the Appellant's argument that duty should not be charged due to the pre-imposition of duty manufacturing date, citing the Apex Court's rulings in Wallace Flour Mill and Vazir Sultan Tobacco Co. The Tribunal held that excisable goods remain liable to duty even if previously exempted, as per the prevailing rate at the time of removal.

In light of the legal principles established by the Apex Court, the Tribunal concluded that the duty on Woollen Yarn cleared by the Appellants on specific dates was payable, despite being manufactured before the duty imposition date. The Tribunal dismissed the appeal, highlighting that the decision in Shree Rajasthan Spinning Industries did not apply as the goods in question were excisable at the time of manufacture.