2000 (3) TMI 672 - AT - Central Excise

Summary

Issues:
Dutiability and rate applicable for yarn under Tariff Heading 18-III of Central Excise Tariff prior to 28-8-1985.

Analysis:
The case revolved around the duty liability and applicable rate concerning yarn falling under Tariff Heading 18-III of the Central Excise Tariff before 28-8-1985. The Revenue argued that single yarn used for doubling by the appellants before this date was deemed removed under Rules 9 and 49 of the Central Excise Rules, requiring duty payment at the rate applicable then. However, the appellants contended that duty should be paid at the rate when the doubled/multifolded yarn was removed from the factory after specific dates. Both lower authorities rejected the appellants' plea, confirming the duty demand through show cause notices.

The appellants appealed to the Tribunal, where their counsel argued that duty is payable upon clearance of goods under Rules 9 and 49 of the Central Excise Rules, thus duty should be paid at the rate applicable during clearance of the doubled/multifolded yarn. The counsel cited relevant cases to support this argument. In contrast, the JDR contended that duty rate applicable is that in force when excisable goods are manufactured, and the authorities correctly demanded the differential duty based on this principle.

The Tribunal acknowledged that single ply yarn is a manufactured product, and duty liability arises at that stage, irrespective of subsequent processes like doubling or multifolding. Citing legal precedents, the Tribunal emphasized that doubling or multifolding does not create a new excisable product, and duty is not leviable at that stage. Therefore, the appellants were liable to discharge duty at the single ply yarn stage, based on the rate applicable then, regardless of subsequent use for doubling or multifolding.

The Tribunal distinguished the cases cited by the appellants' counsel, stating they did not align with the present circumstances. Ultimately, the Tribunal found no merit in the appeals, dismissing all four cases based on the legal principles discussed and the duty liability accruing at the single ply yarn manufacturing stage, unaffected by subsequent processes or clearance timings.