9911796707
TMI Blog1991 (9) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Tribunal. 2. The proceedings giving rise to the present order arise out of an objection of the Central Excise Revenue Audit, according to which exemption under Notification 172/72-C.E., dated 24-7-1972 being applicable only to hard waste, in the absence of any segregation of different types of waste which arise at different stages, the exemption was not available to mixed waste (viz. cut-waste, reeling and coning waste, whether cut-waste, spool cut-waste etc.). The issue turns on the interpretation of Notification 172/72-C.E. in which hard waste falling under Items 18, 18A, 18B, 18C, 18E and 18F of the First Schedule to the Central Excises Salt Act, 1944 - the erstwhile Central Excise Tariff Schedule - is exempt from the whole of the duty. This notification has a proviso so far as cellulosic spun yarn falling under Item 18III and cotton yarn falling under 18A are concerned. It is in respect of these two varieties only that the proviso stipulates that exemption would apply only to such waste (hard waste) as may arise prior to removal of the said cellulosic spun yarn and cotton yarn for weaving. The Explanation appended to the notification refers to waste yarn (hard waste) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing into the notification what is not expressly found therein. 4. Shri Dave also referred to Notification 53/72-C.E., dated 17-3-1972, Notification 272/83-C.E., dated 18-11-1983 and submitted that these would not be applicable to waste yarn generated in the factory of the appellants because the former exempts specified varieties which are generated in a composite textile mill, while the latter exempts non-cellulosic waste which are not in the form of waste yarn. He submitted that the appellant is neither a composite textile unit nor the waste yarn in question can be treated as non-cellulosic waste. Therefore, these two notifications would not be applicable and the notification appropriately attracted in the appeal is Notification 172/72. Even assuming that the other notifications apply, it is well-settled that assessee takes the benefit of such notification which confers most beneficial exemption to him. For this purpose he placed reliance on the decision of the Bombay High Court in Indoswe Engineers Private Limited v. Union of India -1989 (41) E.L.T. 217 (Bom.). 5. The appellants case is that even in the order dated 15-10-1985 which led to the present appeal, the Asstt. Collec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E.L.T. 134. With regard to the stage at which finished yarn comes into existence, he placed reliance on another decision of the Tribunal in Lohia Machines v. Collector of Central Excise - 1988 (38) E.L.T. 336. Shri Chakraborty submitted that the Tribunal had decided in this case that weaving on cops is the stage when the finished yarn comes into existence and any waste arising before that stage would be waste arising during the course of manufacture. He went on to argue that exemption under Notification 172/72 could not be extended to yarn waste arising at all stages since such yarn waste was mixed up by the appellants themselves. The burden of segregation was naturally on the assessee since it is the assessee who was claiming benefit of the notification and, in the absence of segregation, the benefit to the entire quantity had to be denied. 9. Distinguishing the Notifications 53/72 and 272/83, the learned SDR submitted that since the appellants waste is non-cellulosic waste, even under Notification 53/72 the rate of duty was Rs. 9/- per kg. He submitted that Notification 172/72 being of a general nature and using the expression waste yarn it necessarily refers to the waste of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred to the decision of the Tribunal in the case of Indian Plastics Ltd. Ors. v. Collector of Central Excise -1988 (35) E.L.T. 434 in which it was held that a show cause notice issued merely on the basis of an audit objection without any independent investigation was liable to be quashed and submitted that the ratio of the decision was fully applicable to the present case because the demands were raised on the basis of an audit objection on the ground that hard waste arising at various stages in the manufacture of filament yarn was not segregated and, therefore, the benefit of Notification 172/72 could not be extended to the entire quantity of waste arising during such manufacture. Finally, Shri Dave placed reliance on the decision of the Tribunal in the case of Hindustan Lever Ltd. v. Collector of Central Excise -1989 (40) E.L.T. 388 for the argument that when two exemption notifications are issued separately and independently, there was no bar to availing more than one notification unless it is barred categorically. He submitted that the appellant was entitled to the benefit of Notification 172/72 even though Notification 53/72 had been relied upon by the Department in the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legation in the show cause notices was that waste in question would be subjected to duty in terms of exemption Notification 53/72, the Assistant Collector has come to the conclusion that since this notification is not applicable to the appellants case, they are to be governed by Notification 272/83 and the duty liability has been worked out in terms of that notification. The basic objection of the audit was that in the absence of segregation of waste yarn (hard waste) arising at different stages of manufacture of filament yarn, the appellants were to be denied even the exemption available to hard waste. We do not think that the authorities have undertaken any investigation after the audit raised the objection to either find out the different varieties of waste that arose or to identify them. The fact which they themselves concede is that exemption Notification 172/72 is available to waste yarn (hard waste) but no one has made any investigation to identify the nature of such waste yarn and the quantity that would arise in the appellants case. There is no charge against the appellants that they had withheld any information from the authorities or undertaken any clandestine activity ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
