2001 (5) TMI 218 - AT - Central Excise

Summary

Issues:
- Whether duty is to be collected at the stage of removal of the yarn from the factory.

Analysis:
The case involved the issue of whether duty should be collected at the stage of removal of yarn from the factory. The appellants were engaged in manufacturing single yarn, multi-folded yarn, and doubled yarn. The Department alleged that duty should have been paid on the price at which the yarn left the factory since only doubled/multi-folded yarn was cleared. The Department issued show-cause notices demanding differential duty. The Asstt. Commissioner and Ld. Commissioner (Appeals) upheld the demand, leading to the appeals before the Tribunal.

The appellants argued that they had paid duty on single yarn as per the Supreme Court's decision in a specific case, and duty was discharged as required. They contended that the process of doubling/multi-folding did not amount to manufacturing, and an exemption notification supported their position. They also highlighted relevant notifications and trade notices supporting their claim.

The Department argued that duty should be paid at the stage when doubled/multi-folded yarn is cleared from the factory, not at the single yarn stage. They emphasized the form in which the yarn was presented for clearance and the necessity of paying duty accordingly. The Department also disputed the applicability of the Supreme Court decision cited by the appellants.

The Tribunal analyzed the evidence, case law, and contentions of both sides. It noted that duty was paid at the single yarn stage, and the removal for further processing should be deemed as removal according to the Central Excise Rules. The Tribunal found that duty paid on single yarn sufficed, and no further duty was required as per the applicable notifications. It rejected the Revenue's argument regarding the specific nature of duty and upheld the appellants' position based on the Supreme Court decision. Consequently, the Tribunal allowed the appeals, granting any consequential relief to the appellants as per the law.

In conclusion, the Tribunal resolved the issue by determining that duty paid at the single yarn stage was sufficient, rejecting the Revenue's arguments and upholding the appellants' contentions based on relevant notifications and legal principles. The appeals were allowed, providing relief to the appellants in accordance with the law.