9911796707
TMI Blog1999 (12) TMI 401X X X X Extracts X X X X X X X X Extracts X X X X ..... gaged in the manufacture of single ply yarn/man-made blended yarn falling under Chapter 51/55 of the Central Excise Tariff Act, 1985. They also consumed captively the single ply yarn in the manufacture of double and multifold yarn. Prior to 20-5-1994 they had been clearing single ply yarn without payment of duty for the manufacture of the double/multifold yarn as the same was permissible by the provisions of Rules 9 and 49 read with Rule 56A of the Central Excise Rules but by Notification No. 23/94-C.E.(N.T.), dated 20-5-1994 the third proviso to Rule 9(1) and sub-rule (4) of Rule 49 and Rule 56A were omitted and as a result thereof the Central Excise duty became payable at single ply yarn stage from 20-5-1994. However, thereafter by Notifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn could be paid either when it was single yarn or thereafter when it became double yarn on manufacture. Even under the Modvat Rules, if any duty was paid on single yarn the same could be taken back as Modvat credit and such credit could have been utilized for payment of duty on the doubled yarn. They also disputed computation of duty on the single yarn, as reflected in the show cause notice by the Revenue Department. 5. But this plea of the appellants was not accepted by the Commissioner on the ground that under the law duty is payable on the single ply yarn being a manufactured product and not when the said yarn is doubled or multifolded. He through the impugned order confirmed the demand of Rs. 61,94,106.58 under Section 11A of the Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture of the single ply yarn and not after the same has been doubled or multifolded. Doubling or multifolding of the same yarn does not bring into existence a new product and no duty is leviable at that stage. It is immaterial, in view of Rule 9(1) of the Central Excise Rules and Section 49 of the Act whether the yarn so manufactured is captively consumed or is subjected to any other or further process. This very law has been reiterated by the Apex Court in the second case. In that case the the appellants paid duty on the doubled/multifolded yarn (as is the position in the case in hand) and not on the single ply yarn. The Apex Court was pleased to hold as under :- Single stage yarn is fully manufactured product and hence excisab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n doubled/multifolded yarn at the time of clearance from the factory and this very view thereafter has been followed by another Division Bench of the Tribunal in M/s. Modern Threads (I) Ltd. and M/s. Modern Woollens Ltd. decided vide Final Order Nos. 573-574/99-D, dated 16-6-1999. But with due respect with those Benches the view expressed by them runs contrary to the law laid down by the Apex Court in the above referred two cases and as such cannot be followed keeping in view the well settled judicial precedent that law laid down by the Apex Court is binding on all the Courts and the Tribunal and has to be given preference over the judgments or orders of the other subordinate Courts and the Tribunal. 12. The law laid down in CCE, Guntur v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the single ply yarn. However, by Notification No. 121/94-CE, dated 11-8-1994 again single ply yarn was exempted from payment of duty if consumed in the manufacture of doubled/multifolded yarn. But admittedly, during the disputed period from 20-5-1994 to 10-8-1994 duty was payable on the single ply yarn before its captive consumption for manufacture of doubled/multifolded yarn. The appellants undisputedly did not pay the duty at that stage and as such the demand of the duty amount of Rs. 61,94,106.58 made from them vide show cause notice dated 30-11-1994 is perfectly valid and legally justiciable. 13. The learned Counsel for the appellants has, however, during the course of arguments contended that in case this Bench did not follow the vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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