2001 (4) TMI 225 - AT - Central Excise

Summary

Issues Involved:
Dutiability of cotton soft waste prior to the amendment of Chapter 52 of Central Excise Tariff w.e.f. 26-5-1995.

Comprehensive Analysis:

Issue 1: Dutiability of Cotton Soft Waste Prior to the Amendment (Pre-26th May 1995):
The appeal concerned the dutiability of cotton soft waste before the amendment of Chapter 52 of the Central Excise Tariff Act in 1995. The dispute arose as to whether soft waste was excisable goods prior to the mentioned amendment. The Deputy Commissioner initially held that no duty was payable for soft waste cleared before 26th May 1995. However, the Department appealed, arguing that excise duty should have been confirmed for soft waste even before the amendment. The Commissioner (Appeals) upheld the Department's view, stating that excise duties are to be charged equal to customs duties under the Customs Act. The appellant contended that excise duty can only be levied on goods specified in the Central Excise Tariff, and soft waste was not excisable prior to the amendment. They argued that the waste in question did not fall under the tariff entry covering waste yarn or garnetted stock. The Tribunal examined the definition of excisable goods under the Central Excise Act and the relevant tariff heading, concluding that soft waste was not covered by the entry and was not excisable prior to the amendment.

Issue 2: Interpretation of Tariff Heading and Excisability:
The Tribunal analyzed the tariff heading relevant to the case, which specifically mentioned "waste yarn (hard waste) (including garnetted stock)" before the amendment. The dispute centered on whether soft waste fell under this entry. The Deputy Commissioner's findings indicated that the soft waste in question, including flat waste, comber noils, and cotton waste, did not correspond to waste yarn or garnetted stock. The Tribunal agreed that the waste was not waste yarn and arose before spinning, aligning with the Deputy Commissioner's decision that soft waste was not excisable under the tariff heading. Despite the Department's argument citing an inclusive definition of waste yarn, the Tribunal maintained that the issue revolved around the dutiability of soft waste, not garnetted stock. References to the Customs Tariff Act and previous court decisions were deemed irrelevant to the dispute regarding central excise duty on soft waste.

Conclusion:
The Tribunal upheld the Deputy Commissioner's decision that cotton soft waste was not liable to central excise duty before the 1995 amendment of Chapter 52. It was established that soft waste did not qualify as excisable goods specified in the Central Excise Tariff Act before the mentioned amendment. Consequently, the Tribunal allowed the appeals of the assessee and overturned the Commissioner (Appeals) order, ruling in favor of the assessee regarding the dutiability of cotton soft waste pre-amendment.