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TMI Blog1988 (8) TMI 234X X X X Extracts X X X X X X X X Extracts X X X X ..... Sacking, etc. These products, manufactured out of jute yarn paid cess under the Jute Manufactures Cess Rules, 1976 read with Section 9 of the Industries (Development Regulation) Act, 1951. 2. The plea of the appellants is that the yarn so consumed was an intermediate product and inasmuch as the finished product in which these were used discharged the excess liability, no cess could be demanded in respect of yarn captively consumed. The demands were raised by the issue of 12 show cause notices and confirmed by a single order passed by the original adjudicating authority. The findings of the original adjudicating authority, while confirming the demands are as under: The assessee again pleaded that if cess is charged on jute yarn and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amendment Validation) Ordinance, 1982 which subsequently became an Act." 3. The appellants filed an appeal against the order of the adjudicating authority before the Collector of Appeals. The findings of the Collector of Appeals on the pleas made are as under: In view of the submission that the demands confirmed in the impugned order includes jute yarn removed under Bond to their other unit, I set aside the order of the Assistant Collector and remand the case back to him for fresh decision according to law. While deciding afresh, the jute yarn which were removed to their sister factories under Bond should be excluded and also the jute yarn which is converted into twine/sacking and ultimately removed on payment of cess leviable on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jute Mills Ltd. 1984 (16) ELT 477. He pleaded that the yarn which is captively consumed was leviable to cess. He pointed out that the point regarding removal of yarn under bond was not taken up before the original adjudication authority and this only finds mention in the order in appeal. He pleaded that the Collector (Appeals) erred in going into this ground. On the question of plea of time bar, he pleaded that he has no objection it be considered being a legal plea, if the matter is ordered to be examined de novo by the Assistant Collector in the light of the pleas of the department. 6. We observe that the question of levy cess in respect of yarn captively consumed was decided by the Tribunal in case of Chitavalasah Jute Mills v. Collec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the whole of the duty of excise leviable thereon nor is chargeable to nil rate of duty. Several things have to be noted in connection with the applicability or otherwise of Rule 9 read with the third proviso to the facts of the present case. The proviso stipulates 3 conditions. The first is that the finished commodity (this expression is being used by us to connote the final product for the manufacture of which excisable goods are permitted to be used either as raw material or component parts) must be excisable goods specified by the Govt. by notification under sub-rule (1) of Rule 56A. Jute, twist, yarn, thread, ropes and twine all sorts and jute manufactures (these fall under item Nos. 18D and 22A respectively of the CET) are speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ders of the Tribunal. Following with respect the ratio of the decision above, we hold that the yarn which is used in the manufacture of twine which is ultimately cleared on payment of cess from the factory, is not required to pay any cess. However, the yarn which is used captively for the manufacture of other jute products is required to pay the cess. 8. So far as the question of time-bar is concerned we observe that the facts regarding the same have not gone into and also there has been no examination as to whether longer time period could be invoked under Rule 11A(1)[Section 11A(1)], in the facts and circumstances of the case. 9. We observe from the order of the Collector that he has for the first time, taken note that some of the yar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o appreciate the impact of the orders issued by the Government imposing the levy of cess vis-a-vis the Notification No. 20/82, dated 20-2-1982 amending the Rules 9 and 49 of the Central Excise Rules, 1944. There is nothing contrary to the provisions of the law in the order (original) warranting de novo adjudication. In fact the Collector (Appeals) has admitted in his order-in-appeal No.176/Cal/84, dated 19-1-1984 passed in an Identical case of M/s. Naffar Chandra Jute Mills Ltd. the propriety of levy of cess on the jute yarns captively consumed under the perview of Rule 9 and 49 of the Central Excise Rules, 1944. Therefore, the order-in-appeal passed by him in the instant case is contradictory one". 12. In view of the findings above in pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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