9911796707
TMI Blog1994 (1) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture of tyre cord and tyre cord fabrics. Duty on nylon yarn so used in the manufacture of tyre cord/tyre cord fabrics is paid at the stage of removal of tyre cord fabrics. During the course of manufacture of tyre cord and tyre cord fabrics some waste of nylon yarn arises on which no duty was paid by the unit. Permission for deferment of payment of duty on nylon yarn at the tyre cord stage was granted by the Collector of Central Excise, Jaipur. According to the department, the unit misused the concession granted to them and evaded central excise duty on the quantity of nylon yarn lost in the process of further manufacture of tyre cords and tyre cord fabrics. They also did not maintain any records of production of nylon yarn etc. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned Counsel and carefully considered their submissions. 6. According to the learned SDR, duty is payable on the entire quantity of yarn issued for manufacture of tyre cord Warp Sheet and any waste arising in the course of manufacture of yarn to fabric has to discharge duty at the rate applicable to yarn. She cites the following decisions in support of her contention : 1. Order No. 218-218A/86-D dated 14-4-1986 2. 1988 (12) ETR 446 3. Hindustan Spg. Wvg. Mills Ltd. v. Collector - 1992 (57) E.L.T. 282 In all the above cases it has been held that duty is to be discharged on the entire quantity of yarn issued for manufacture of fabric and not on the quantity of yarn actually contained in the fabric. She also submits that the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , bearing No. E/2055/84-D against this order is pending before this Tribunal and it relates to the period 1-3-1975 to 31-3-1977. For the subsequent period the appeal of Shri Ram Rayons, Kota against classification list was disposed by the Collector (Appeals) order No. 49-CE/JPR/85 dated 26-2-1985, following the previous order and the appeal of the Revenue against this order was dismissed by order No. 74/93-D dated 26-2-1993. 9. As the basis of the present impugned order is that doubling and twisting of nylon yarn does not amount to manufacture and nylon tyre cord continues to fall under the same Tariff Item 18 as nylon single yarn, we respectfully follow the ratio of the order No. E/74/93-D dated 26-2-1993 which in turn relies upon severa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Collector (Appeals) on one hand and the appellants on the other have not kept in view the above basic facts and, therefore, their views including those on time bar were not acceptable. We are not concerned with the clearance of the yarn waste falling under Tariff Item 18/4 recorded in RT-12 Returns (assessed or unassessed) as permission was given by Collector vide his order, dated 5-3-1975 is for assessment of yarn used in the manufacture of warp sheets - the basis for calculation being the weight of warp sheet minus the percentage of cotton yarn used in the fabric. 15. In the above circumstances, the extended period of limitation has been correctly applied and the Department s case was not time barred. 16. In view of the above position ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time of removal and its subsequent payment at the time of clearance of the fabric and, therefore, the Collector (Appeals) order was required to be set aside and the appeal accepted as held by the Vice President . 19. Both sides were heard when they reiterated the arguments raised before the double Member Bench and which have been brought out in the separate orders recorded by the Hon ble Member Judicial and the Hon ble Vice President. The issue involved in this case is whether the duty is recoverable on the waste resulting during the conversion of single nylon yarn into tyre cord. The Hon ble Member Judicial has taken the view that the doubling and wasting of nylon yarn - in conversion of single yarn into tyre cord - does not amount to ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /86-D dt. 14-4-1986 (ii)1988 (12) ETR 446 (iii)1992 (57) E.L.T. 282 where it has been held that duty is to be discharged on the entire quantity of yarn issued for manufacture of fabric and not on the quantity of yarn actually contained in the fabric, I am agreeable with the view held by the Hon ble Vice President that the duty was required to be paid on the entire quantity of yarn, a part of which was lost during conversion of single yarn into tyre cord. This in accordance with the provisions of Rules 9 and 49 of the Central Excise Rules. In terms of Rule 9 no excisable goods shall be removed from any place where they are produced. .. whether for consumption, export, or manufacture of any other commodity in or outside such place .... ..... X X X X Extracts X X X X X X X X Extracts X X X X
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