1999 (12) TMI 401 - AT - Central Excise

Summary

Issues:
- Appeal against order confirming excise duty demand under Section 11A of the Central Excise Act, 1944 for single ply yarn clearance.
- Interpretation of excise duty liability on single ply yarn for captive consumption in the manufacture of double/multifold yarn.
- Applicability of Notifications affecting duty liability during the period in question.
- Legal precedent regarding excise duty payment stage on yarn as per Apex Court rulings.
- Contrasting views of Tribunal benches on excise duty liability at different stages of yarn production.

Analysis:
1. Excise Duty Demand Confirmation: The appeal was filed against an order confirming a demand of Rs. 61,94,106.58 under Section 11A of the Central Excise Act, 1944 for clearance of single ply yarn without duty payment for captive consumption in manufacturing double/multifold yarn. The appellants contested the demand based on the duty payment stage, leading to the Commissioner's decision to uphold the demand.

2. Excise Duty Liability Interpretation: The dispute revolved around the excise duty liability on single ply yarn, affected by changes in notifications. The appellants argued duty payment was not required on single ply yarn if duty was paid on double/multifold yarn. However, the Commissioner held that duty was payable on single ply yarn as a manufactured product, irrespective of subsequent processing stages.

3. Notification Impact and Legal Precedent: Notifications issued during the relevant period altered duty liability on single ply yarn, creating confusion regarding the duty payment stage. The Tribunal referred to Apex Court judgments emphasizing that excise duty is leviable on single ply yarn, not on subsequent processing stages like doubling or multifolded yarn, regardless of captive consumption.

4. Contrasting Tribunal Views: The appellants cited Tribunal judgments supporting their contention that duty payment on double/multifold yarn exempted duty on single ply yarn. However, the Tribunal rejected this argument, emphasizing the binding nature of Apex Court rulings over Tribunal decisions, leading to the dismissal of the appeal.

5. Final Decision: The Tribunal dismissed the appeal, upholding the excise duty demand on single ply yarn during the disputed period. The legal principle established by the Apex Court regarding excise duty payment at the single ply yarn stage prevailed over conflicting Tribunal decisions, reinforcing the obligation to pay duty on the manufactured product, irrespective of subsequent processing stages.