2013 (10) TMI 887 - AT - Central Excise

Captive Consumption Waiver of Pre-deposit - Whether the appellant is liable to pay central excise duty on jute single yarn in bobbins captively consumed in the manufacture of multiple fold yarn in plain reel hanks without payment of duty Held that - The finished product, i.e, yarn in multiple fold has been cleared without payment of duty and therefore appellant is not eligible for the exemption for captive consumption - the appellant has not been able to make out a prima facie case for waiver - the appellant is directed to deposit the entire amount of duty demanded as pre-deposit upon such submission rest of the duty to be waived till the disposal Partial stay granted.

Summary

Issues:
Whether the appellant is liable to pay central excise duty on jute single yarn in bobbins captively consumed in the manufacture of multiple fold yarn in plain reel hanks without payment of duty during different periods from April 1996 to February 1997.

Analysis:

1. The appellant contended that Notification No. 26/95 exempts single yarn from duty payment, thus claiming they were not liable to pay any duty. Additionally, they argued for MODVAT credit under Notification No. 7/94-CE (NT) dated 1.3.1994.

2. The Assistant Registrar argued that the exemption under Notification No. 26/95 did not apply to the appellant, emphasizing that the clearance of single yarn in bobbins did not qualify for the exemption, which was applicable only when single yarn was cleared in hanks. The marketability of the goods was also disputed, with the Assistant Registrar pointing out that the classification list showed single yarn in bobbins, indicating marketability.

3. The Tribunal considered both arguments and found that single yarn in bobbins was indeed marketable. Regarding the exemption, it was noted that the exemption under Sl. No. 6 of Notification No. 26/1995 applied only to single yarn cleared in hank form, not in bobbins. As the finished product, multiple fold yarn, had been cleared without payment of duty, the appellant was deemed ineligible for the exemption for captive consumption. Consequently, the Tribunal directed the appellant to deposit the entire duty demanded as a pre-deposit within 12 weeks.

This judgment clarifies the applicability of central excise duty on jute single yarn in bobbins used in manufacturing multiple fold yarn. The interpretation of the exemption notification and the marketability of the goods were crucial in determining the appellant's liability to pay duty. The Tribunal's decision underscores the importance of complying with duty payment regulations and the specific conditions outlined in exemption notifications.