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TMI Blog2009 (4) TMI 752X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assistant Commissioner confirming the demand of duty of Rs. 30,80,348/- together with interest. 2. The facts of the case are that the appellants buy grey 100% cotton fabrics from the market. They also buy cotton yarn from the market and manufacture grey 100% cotton fabrics out of the same. The said grey 100% cotton fabrics, purchased as well as manufactured by the appellants, are subjected to the process of bleaching within the factory. 3. Bleaching of cotton fabrics amounts to manufacture in terms of Note 3 to Chapter 52. During the period under dispute i.e., September, 2000 to August, 2001, the bleached cotton fabrics falling under Chapter Heading 5207.21 attracted Basic Excise Duty @ 16% ad valorem (for short, 16% BED). In addition, the bleached cotton fabrics also attracted Additional Excise Duty @ 8% ad valorem (for short 8% AED) payable under Additional Duties of Excise (Goods of Special Importance) Act, 1957. 4. The bleached cotton fabrics were not removed outside the factory but were captively consumed by the appellants in the manufacture of plastic coated fabrics within the factory. These coated fabrics, falling under heading Chapter Heading 5903.90, were cleare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in a factory and captively consumed in the manufacture of specified final products from whole of the excise duty leviable thereon which is specified in the Schedule to the Central Excise Tariff Act, 1985. It is their submission that the AED is also duty of excise specified in Schedule to Central Excise Tariff Act, 1985. Therefore, the aforesaid notification exempts not only the BED but also the AED. Hence, according to them, the exemption has been correctly availed by them and the demand of duty is incorrect in law. For this, the appellants have relied upon the decision of the Tribunal in the case of MRF Ltd. - 2001 (130) E.L.T. 748 (T) in which it was held that the tyre cord fabrics captively consumed by MRF Ltd. was exempt from AED in terms of Notification No. 67/95-C.E., dated 16-3-1995. 10. The appellants further stated that Section 3(3) of the AED (GSI) Act, 1957 does not have provisions relating to interest and hence interest is not imposable. For this, they relied upon the Tribunal s decision in Tonira Pharma s case - Misc. Order No. M/293/08/CSTB/C-I, dated 9-5-2008 [2009 (237) E.L.T. 65 (T)], in which it was held that in the absence of specific borrowing provision rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital goods and inputs, if captively consumed within the factory of production, from whole of the duty of excise leviable thereon which is specified in the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986). The duty of excise includes (1) Duties Specified in the first Schedule i.e. Basic Excise Duty (2) duties specified in the second Schedule i.e. Special Excise duty. The Additional Excise Duty is not included in the Schedule as the same is levied in lieu of Sales Tax under Goods of Special Importance Act, 1957. Thus, as per Notification No. 67/95-C.E., dated 16-3-95, the specified excisable goods manufactured in a factory and used in the factory in or in relation to the manufacture of final products are exempt from payment of excise duty leviable thereon. As the additional duty of excise leviable under Additional Duties of Excise (Goods of Special Importance) Act, 1957 was not covered under the said Notification, non payment of additional excise duty by the appellants is incorrect. Also Notification No. 67/95-C.E., dated 16-3-1995, has no reference to the provisions of Additional Duties of excise (Goods of Special Importance) Act, 1957 and accordingly, the additiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se does not mean exemption also from special excise duty, additional excise duty or auxiliary duty. The expression duty of excise used in the notifications cannot be construed as comprehending also special duty of excise or additional duty of excise merely because source of power under which exemption issued is Rule 8(1) of the Central Excise Rules. In case exemption is for special excise duty or additional duty of excise, the recital of the source of power in the exemption notification would invariably be Rule 8(1) but read with the relevant provisions of statute levying special duty of excise; or additional duty of excise, as the case may be . 4. In the instant case, Notification No. 1/93-C.E., dated 28-2-1993 had been issued only under Section 5A of the Central Excise Act, without having reference to the additional duty of excise leviable under Section 3 of Additional duties of Excise (Goods of Special Importance) Act, 1957. Therefore, this notification cannot be deemed to be applicable to the additional excise duty, special excise duty or auxiliary duty. The additional excise duty had been levied on fabrics in the instant case, under the Additional Duties of Excise (Goods o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be raised when the situation is revenue neutral in the sense that the credit is available. 17.1 The assessee in CCE v. Textile Corporation of Marathawada - 2008 (231) E.L.T. 195 (S.C.) had facilities in its factory for carrying out bleaching, dyeing, printing and mercerizing of textile fabrics. The assessee subjected the fabrics to any one or more of such processes, paid duty at the last stage and cleared them. The Department alleged that the assessee was required to pay duty each time the fabrics was subjected to one process. Thus, in the case of fabrics, which were subjected to bleaching, dyeing and printing, then the duty was required to be paid by the assessee on the bleached fabrics and once again upon that fabrics, when it was dyed and a third time when that dyed fabrics was subjected to printing. 17.2 The Hon ble Supreme Court held that if the assessee has to pay the excise duty at each and every stage of manufacturing, it would be entitled to the credit and the whole exercise would be revenue neutral. In other words, duty, if paid on bleached fabrics was available as credit for the payment of duty on dyed fabrics and duty, if paid on dyed fabrics was available as cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd utilized it to pay NCCD on branded chewing tobacco. The CESTAT held that the demand of NCCD on intermediate unbranded chewing tobacco was Revenue neutral and hence dismissed the appeal of Revenue. Similar view was taken by the CESTAT in the case of S.R. Fragrance Ltd. v. CCE, Chandigarh reported in 2009 (235) E.L.T. 877 (Tri.-Del.). 18. A point has been raised by the learned SDR that the CESTAT is a creature of stature and it cannot overlook the violation of the exemption Notification and that the CESTAT is not bound by the principle of equity because of the reason of revenue neutrality. We are of the view that the judgements of the Hon ble Supreme Court lay down the law of the land and are binding on all concerned including the CESTAT. These cannot be overlooked or ignored unless the facts are distinguishable or there are cogent and valid reasons to differ with the same. In view of the binding nature of the Supreme Court s Judgements cited above, we dismiss the observations of the learned SDR with the contempt it deserves. 19. The Judgement of the Supreme Court in the case of Mahindra and Mahindra Ltd. [2005 (179) E.L.T. 21 (S.C.)] relied upon by the learned SDR holds that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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