9911796707
TMI Blog1998 (6) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... by him captively for production of fabrics was given an option to follow the special procedure under the Rules 96V W and instead of paying excise duty on captively consumed yarn, it can pay duty at the rate payable on the cotton fabric itself. The appellants had opted to pay duty as per the special procedure. They had filed price lists for the cotton fabric falling under Item 19-I of the old Central Excise Tariff which were also approved by the proper officer. 2. Proceedings were initiated against the appellants Ashoka Mills by issue of show cause notice in which it was alleged that the appellants were availing special procedure in respect of cotton yarn used for production of cotton fabrics falling under Item 19 CET under Rule 96 of Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. The Assistant Collector s order was similarly upheld by the Collector (Appeals), Bombay by the impugned order but the demand, it was held, was enforceable only for the one year period under Rule 10 read with Rule 173J. 5. The appellants challenged the above orders before the Gujarat High Court raising the issue that duty on yarn cannot be included in the assessable value of fabrics and also that proceedings initiated under show cause notice invoking Rule 10A would not survive after it was substituted on 6-8-1977. The High Court decided the issues by its order dated 4-3-1993 against the appellants and granted the appellants prayer to withdraw the petitions and directed the Tribunal to decide appeal with regard to the other contentions i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lants as a special procedure merely postponed the stage of collection of duty but that could not be confused with the liability to pay duty which arose at the stage when yarn was manufactured. In such a context it has been held by High Courts that the assessable value of cotton fabrics must include the value of yarn plus the excise duty required to be paid thereon. See in this context Gujarat High Court judgment in the case of Mahendra Mills v. UOI - 1988 (36) E.L.T. 563 and that of Bombay High Court in Kamala Mills v. UOI - 1988 (34) E.L.T. 539. It is seen that as against the Maheswari Mills decision (supra) of the Tribunal rendered in 1990 relied upon by the appellants, there is a subsequent decision of the Tribunal in Swadeshi Mills v. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resh show cause notice under Rule 10. However, it is seen that the Tribunal in the case of the Verma Industries v. CCE 1984 (18) E.L.T. 403 has held that the demand will not be vitiated because it was made under Rule 10A instead of Rule 10. Hence this contention is unacceptable, especially when the grounds set out are unambiguously for short levy. 8. We find substance however, in the plea of appellants Raipur Manufacturing Company that the show cause notice dated 28-10-1977 issued to them under Rule 10 as it stood at the relevant time is time barred, as that Rule at the relevant time provided time limit of six months, whereas the notice covers a period 1-2-1977 to 30-4-1977, which is beyond the period of limitation prescribed under the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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