2000 (3) TMI 243 - AT - Central Excise

Summary

Issues:
1. Duty demand on PV blended yarn clearance without payment of duty.
2. Interpretation of Rule 191BB regarding removal of raw materials and manufactured goods.
3. Consideration of Notification No. 33/90-C.E., dated 5-9-1990 for duty exemption conditions.
4. Whether the duty demand on the manufactured yarn was justified.

Issue 1:
The appeal involved a dispute regarding the duty demand on PV blended yarn cleared without payment of duty by the respondents. The department alleged duty evasion amounting to Rs. 2,02,468/- on 12,575.7 Kgs of PV blended yarn cleared to another company. The respondents argued that they followed the proper procedure under Rule 191BB and did not evade central excise duty. The Collector initially dropped the duty demand, leading to the appeal.

Issue 2:
The central issue revolved around the interpretation of Rule 191BB concerning the removal of raw materials and manufactured goods. The appellant argued that the yarn manufactured by the respondents was not exempt from duty as there was no specific notification for such exemption. The appellant contended that the respondents did not hold an intermediate advance license, thus justifying the duty demand on the manufactured goods.

Issue 3:
The consideration of Notification No. 33/90-C.E., dated 5-9-1990 was crucial for determining the eligibility conditions for duty exemption. The notification specified conditions related to the manufacturer holding an advance license, quantity of intermediate goods, and the utilization of such goods for export purposes. The judges examined the notification and ruled that the respondents, as the advance license holder, had followed the necessary procedures for export obligations, including using specified raw materials.

Issue 4:
The final determination was whether the duty demand on the manufactured yarn was justified. The judges upheld the Collector's decision, stating that the respondents had complied with the procedures outlined in Rule 191BB and Notification No. 33/90-C.E. They found no legal infirmity in the order and rejected the appeal, affirming that the duty demand was justified based on the specific circumstances and legal provisions involved in the case.