9911796707
TMI Blog2001 (8) TMI 772X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notice (1) RELIANC JUTE MILLS (INTERNATIONAL) LTD. Rs. 35,82,548/- Rs. 35,82,548/- 20-5-94 To 10-8-94 9-2-99 (2) MEGNA JUTE MILLS Rs. 37,20,574/- NIL 20-5-94 To 10-8-94 16-11-94 (3) HOOGHLY MILLS CO. LTD. Rs. 22,40,235/- Rs. 4,62,677/- -DO- 17-11-94 (4) NEW CENTRAL JUTE MILLS Rs. 77,45,332/- Rs. 1,00,000/- -DO- 16-11-94 (5) HOOGHLY MILLS PROJECT CO. Rs. 47,31,350/- Rs. 47,31,350/- -DO- 29-1-97 (6) CHEVIOT COM- PANY LTD. Rs. 47,89,851/- (DUTY) Rs. 1,86,112/- (CESS) Rs. 5,00,000/- -DO- 16-11-94 3. The facts relating to all the above appeals are identical. The appellants are engaged in the manufacture of jute bags, which during the relevant period were being cleared by them on payment of Central Excise Duty. Apart from their final product, the appellants were also manufacturing jute yarns and jute fabrics which were being consumed by them captively. The period involved in all the appeals is from 20-5-94 to 10-8-94. Prior to 20-5-94, the jute yarns used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of duty on jute bags. In nutshell, the appellants contention is that there was no loss of Revenue and if they would have paid the duty, the same was available to them for discharge of duty burden on their final product. As such, their prayer is that the duty confirmed by the Commissioner on the intermediate products captively used in the manufacture of the final products, was a result of non-observance of procedural formalities and should not be upheld on that ground. It has been argued that all the three products i.e. jute yarns, jute fabrics and jute bags, attracted the same rate of duty of 5%. As such, there was no Revenue loss and the entire exercise was Revenue neutral. 6. The appellants have also argued that the exemption available to jute yarns and jute fabrics was again restored with effect from 11-8-94 by issuance of Notification No. 121/94. Their contention is that the said notification should be considered to be a clarificatory notification because the intention of the Government all along has been not to levy any duty on the intermediate product and to burden the jute mills. This intention is clear from the fact that on withdrawing the exemption, the Modvat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of duty on the said products. Learned SDR submits that the question of taking the Modvat credit would arise only if the appellants would have paid the duty on the yarns and fabrics. The question of Revenue neutral exercise was considered by the Larger Bench of the Tribunal in the case of Jay Yuhshin Limited v. CCE reported in [2000 (119) E.L.T. 718 (T-LB) = 2000 (39) RLT 501] and it was held that the same cannot be made the basis for not paying the duty on the goods which are otherwise dutiable. As regards the clarificatory nature of the Notification No. 121/94-C.E., dated 11-8-94, learned SDR argued that there is nothing in the said notification to suggest that the same would operate retrospectively. Similarly, he submits that no doubt the marketability of a product is required to be established by the Revenue. It is a fact of common knowledge that jute yarns and jute fabrics are traded in the business circle and were definitely capable of being marketed. As such, the appellants submission as regards the non-marketable nature of the jute yarns and fabrics, cannot be upheld. As regards the limitation, learned SDR submits that the entire facts were in the knowledge of the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vailable in respect of those duties which are paid on the inputs. If no duty is paid on the inputs i.e. jute yarns and fabrics in the present cases, how can the credit of the same be available to the appellants for payment of duty on their final products. In fact, we find that an identical situation was before the Tribunal in the case of Prabhat Zarda Factory v. Commissioner of Central Excise, New Delhi wherein it has been held that on withdrawing of exemption vide Notification No. 23/94, dated 20-5-94 in respect of unbranded chewing tobacco, the same became liable to duty, but with the facility of Modvat credit introduced vide Notification No. 24/94-C.E. also dated 20-5-94. The exemption as in the present cases, was restored vide Notification No. 121/94, dated 11-8-94. The Tribunal vide its Order Nos. 727-728/96, dated 11-12-96, had confirmed the demand of duty of unbranded tobacco, but allowed the appellants to take the credit of the same for the purposes of discharge of duty on their final products. The situation in the present cases is identical. The reference by the appellants to the case of Indian Rayon Industries Ltd. is not applicable inasmuch as the appeal was not allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification should be considered as a clarificatory notification and as such, should be made effective with effect from 20-5-94. Admittedly, during the period, 20-5-94 to 10-8-94, the Modvat credit was available to the appellants. The duty paid on yarns and fabrics was available as a credit to the appellants subject to following of procedure etc. The said Explanatory Note is only making a reference to that facility and is exempting the goods, if captively consumed instead of paying duty at two stages and then availing the credit. How this Explanatory Note can make the notification clarificatory and thus retrospectively effective, is not understood. There is nothing else to reflect upon the intention of the legislation that the exemption in respect of jute yarns and fabrics, if consumed effectively, should be made retrospectively. On the contrary, we find that the appellants have approached the Government of India for issuance of 11C notification as recorded in some of the impugned Orders. But the appellants requests have been turned down by the Government of India. As such, it cannot be said that it was the intention of the Government to make the Notification No. 121/94 to be effe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitation, we find that in most of cases, show cause notices were issued within a period of six months. It is only in the case of M/s. Reliance Jute Mills (International ) Ltd. and in the case of M/s. Hooghly Mills Projects Company Ltd. that the notices have been issued beyond the period of six months. In these appeals, the appellants have submitted that the same are barred by limitation as provided under Section 11A inasmuch as the entire facts were before the Revenue. The Commissioner in the case of M/s. Reliance Jute Mills has observed that the appellants had not been maintaining any statutory records showing the captive consumption of yarn and fabric in question. Though their removal was covered by internal challans, but the same will not serve the purpose inasmuch as they were not submitted to the Central Excise Authorities. He has also observed that it is not a case where the noticee was unaware of the excisable nature of the jute fabrics used captively. Instead, they withheld payment of duty and explored the other avenues. In their replies to the show cause notices, the said appellants submitted that they did not file the required declaration since the same was not an effec ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
