9911796707
TMI Blog2007 (2) TMI 459X X X X Extracts X X X X X X X X Extracts X X X X ..... his letter dated 30-11-2001 permitted M/s. LTML to clear grey fabrics without payment of duty, to the assessee for processing and to get back the processed fabrics without payment of duty for conversion into garments for export in terms of Rule 19 of the Central Excise (No. 2) Rules, 2001 read with Notification No. 43/2001-C.E. (N.T.), dated 26-6-2001. Accordingly, M/s. LTML were clearing grey fabrics without payment of duty to the assessee for processing and the latter was clearing the processed fabrics without payment of duty, to the former for conversion into garments for export. The department issued the following eight show-cause notices to the assessee for recovery of a total amount of duty of Rs. 5,87,94,338/- from them :- S. No. CSCN No./date Duty demanded (in Rs.) Commodity on which duty demanded Period covered by the SCN 01. 174/2002-2003 dated 28-8-2002 71,56,430/- Processed fabrics August 2001 02. 214/2002-2003 dated 1-10-2002 21,18,696/- Processed Yarn Sept 2001 to June 2002 03. 215/2002-2003 dated 1-10-2002 76,87,694/- Processed fabric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emoval of goods for the purpose of utilization in the next process should also be understood as procurement . Further, they relied on the Board s Circular No. 303/19/97-CX., dated 11-3-97 and Circular No. 229/63/96-CX., dated 8-7-96 in support of their plea that the benefit under Rule 19 ibid (corresponding to erstwhile Rule 13 of the Central Excise Rules, 1944) was not deniable to them as long as the processed fabrics cleared by them to M/s. LTML were used only for the manufacture of export goods. They pointed out that the new Rule 19 of the Central Excise (No. 2) Rules, 2001 read with Notification No. 43/2001-C.E. (N.T.) had only simplified the procedure laid down under the erstwhile Rule 13 of the Central Excise Rules, 1944 read with Notification No. 47/94-C.E. (N.T.). The new provisions were not to be understood as having abrogated the benefit available under the old provisions. In adjudication of the dispute, learned Commissioner confirmed the demand of duty against the assessee under Section 11A(1) of the Central Excise Act with interest thereon under Section 11AB of the Act. He, however, dropped the proposal for imposing penalty. 2. The department s appeal is against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L in 1997 under the erstwhile Rule 13 was being continued under the new Rule 19 of the Central Excise (No. 2) Rules, 2001. In the impugned orders, learned Commissioner has chosen to decide as to whether the continued permission under Rule 19 ibid read with Notification No. 43/2001-C.E. (N.T.) was correct. After examining the relevant provisions of the said Rule and Notification, learned Commissioner has taken the view that procurement of excisable goods by the exporter in terms of Notification No. 43/2001-C.E. (N.T.) was a prerequisite for the assessee to avail themselves of the benefit under Rule 19 read with the Notification. He noted that M/s. LTML had not procured grey fabrics and had only manufactured the same and, therefore, the assessee was not entitled to claim the benefit of Rule 19 read with the Notification in respect of the products manufactured by processing such grey fabrics. Ld. Commissioner, further, observed that the permission given to M/s. LTML by the jurisdictional AC itself was beyond the scope of enabling provisions/notification . We are unable to accept the decision of the Commissioner, which is contrary to the expressed/provisions of Rule 19, which re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal Rate of Duty for Manufacture of Excisable Goods) Rules, 2001; (v) The manufacturer or processor may remove the excisable goods so received as such or after these have been partially processed during the course of manufacture or processing of finished goods to a place outside the factory - (a) for the purpose of test, repairs, refining, reconditioning or carrying out any other operation necessary for the manufacture or processing of the finished goods and return the same to his factory without payment of duty for further use in the manufacture or processing of finished goods or remove the same without payment of duty in bond for export, provided that the waste, if any, arising in the course of such operation is also returned to the said factory of the manufacture or processing. (b) For the purpose of manufacture of intermediate products necessary for the manufacture or processing of finished goods and return the said intermediate products to his factory for further use in the manufacture or processing of finished goods without payment of duty or remove the same, without payment of duty in bond for export, provided that the waste, if any arising in the course o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Attorney General to find out whether the facts of the appeals are covered by the Circular of the Central Board of Excise and Customs, New Delhi No. 306/22/97-CX., dated 20th March, 1997. Learned Attorney General after examining the same today has conceded that the Circular covers the facts of these cases against the Revenue. Therefore, these appeals are dismissed . 4. The above circular of the Board was relied on by the assessee before us also. In view of the decision in M.Tex case, the denial of exemption under Notification No. 214/86-C.E., to the assessee by the lower authority cannot be sustained. The decision of the Tribunal in Modern Mills Ltd. v. Collector, 1996 (82) E.L.T. 90, relied on by ld. counsel, is also supportive of the assessee s case. 5. In the result, we hold that the assessee was entitled to remove processed fabrics without payment of duty, to M/s. LTML during the period of dispute in terms of Rule 19 of the Central Excise Rules, 2001 read with Notification No. 43/2001-C.E. (N.T.). Accordingly, their appeals are allowed. Consequently, the Revenue s appeal for imposing penalty on the assessee gets dismissed. (Operative part of the order was pronoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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