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TMI Blog2013 (9) TMI 494X X X X Extracts X X X X X X X X Extracts X X X X ..... the Notification No. 47/94 and Notification No. 43/2001 – the notifications had been issued under Rule 13 of Central Excise Rules, 1944 and Rule 19 of Central Excise Rules, 2001 respectively for receiving the goods without payment of duty for manufacture of export goods. These notifications contain many conditions to be fulfilled by the manufacturer or processor - There was a specific provision in these notifications for the waste generated during the processing/manufacture of the export goods - Dutiablity of waste will be governed by the specific provisions under notification - If the duty was demanded on waste as applicable to fabrics under Chapter X procedure or Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001, then provisions relating to the waste under these notifications will become redundant - As regards the execution of bond, movement of goods under AR-3 procedure, maintenance of account of goods received, submission of quarterly RT-11 return etc., the manufacturer was required to follow the Chapter X procedure or procedure under the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tty Garments Pvt. Ltd and M/s. Gupta Trading Co. Since the issue involved in all the appeals is same, all appeals are being taken up together for disposal. 2. M/s. Shetty Garments Pvt. Ltd. (SGP) and M/s. Gupta Trading Co. (GTC) are job workers of M/s. Bombay Dyeing Mfg. Co. Ltd. (BDMC) and both are operating under Rule 13(1)(b) of Central Excise Rules, 1944/Rule 19 of Central Excise Rules, 2001 and they are manufacturing made-up articles. Necessary B-16 Bond for movement of fabrics has been executed jointly by M/s. BDMC, M/s. SGP and M/s. GTC before clearance of the goods and after getting the necessary permission from the jurisdictional Deputy/Assistant Commissioner of Central Excise to work under Rule 13(1)(b)/19, the goods were cleared for job work under AR-3 form from M/s. BDMC and these are used for manufacture of made-up articles. While manufacturing made-up articles, there is a small generation of fents, rags and chindies defective made-ups and unstitched cuts of processed fabrics. An investigation was done at the warehouse of M/s. BDMC and subsequently show cause notices were issued to M/s. SGP and M/s. GTC and its partner alleging that percentage of waste as shown in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 43/2001, dated 26-6-2001 and 47/94, dated 22-9-1994. For the said purposes, the manufacturer is required to file declaration and also supposed to declare the input-output ratio and follow the procedure under Chapter X procedure or Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001. M/s. SGP and GTC have cleared the fabrics in the guise of fents, rags and chindies as alleged in the show cause notice. These clearances were over and above the quantity of waste permissible as per the declaration filed by them. He submitted that it was not proper on part of the Commissioner (Appeals) to set aside the demand on merit as this is the fact that the goods have been received by them without payment of duty and they are supposed to maintain account for the fabrics received by them. Any waste or damaged fabrics arising during the course of manufacture of the fabrics is subject to Central Excise duty and, therefore, Revenue is justified in demanding the duty at the cost of fabrics as received by them under Bond. 4.1 As regards the dropping of demand by the Commissioner (Appeals) on time-bar, he submitted that M/s. SGP and GTC have supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is mentioned that any waste arising from the processing of materials may be removed on payment of duty as if such waste is manufactured in the factory of the manufacturer. He therefore submitted that though the Commissioner (Appeals) has allowed the appeal for the period prior to 1-7-2001 the duty is not chargeable w.e.f. 1-7-2001 also as the waste generated is within the permissible limit and as per Notification, duty can be paid by them as waste. He, therefore, submitted that all the Revenue s appeals need to be dismissed and their appeals against the Commissioner (Appeals) order are required to be allowed. 5.1 In case of one appeal against Order No. BR(466-467)124-125/MV/2005, dated 5-9-2005 in which the Order-in-Original is upheld, he submitted that the same Commissioner (Appeals) while passing the Order-in-Appeal No. BR(2748)130/MI/2005, dated 10-5-2005 and BR(359-360)16-17/MV/2005, dated 9-2-2005 has set aside the Order-in-Original and allowed their appeal, therefore, he cannot take a different stand while passing the other order on 5-9-2005. He, therefore, submitted that his appeal against the BR(466-467)124-125/MV/2005, dated 5-9-2005 also needs to be allowed. 5.2 Lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations, the manufacturer is required to declare input-output ratio to the Assistant Commissioner of Central Excise or Dy. Commissioner of Central Excise. We note that in both the Notifications No. 47/94, dated 22-9-94 and No. 43/2001, dated 26-6-2001, there was specific provisions with regard to the waste generated during the process of excisable goods. For the sake of convenience, these provisions are reproduced below :- Notification No. 47/94, dated 22-9-1994 : 5. Any waste arising from the processing of materials may :- (a) be removed on payment of duty as if such waste is manufactured in the factory of the manufacturer; (b) be removed without payment of duty, where it belongs to such class or category of waste as the Central Government may from time to time by order specify for the purpose for being used in the manufacture of the class or categories of goods as may be specified in the said order, subject to the procedure under Chapter X being followed; or (c) be destroyed in the presence of proper officer on the application made by the manufacturer, and if found unfit for further use, or not worth the duty payable thereon, the duty payable thereon be remitted : P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by M/s. SGP and GTC in terms of these Notifications No. 47/94 and 43/2001 only. 11. In Orders-in-Appeal No. SDK(2330-2331)12-13/M-I/2004, dated 28-1-2004 and SDK(268-269)9-10/MV/2004, dated 31-1-2004, the Commissioner (Appeals) has held that prior to 1-7-2001 the demand would be hit by time-bar as M/s. SGP and GTC had kept the department informed about their clearances through RT-12 return and price declaration of the waste fabrics. We do not find any infirmity in these findings of the Commissioner (Appeals). Therefore, two appeals filed by the Revenue against these orders on the ground of limitation are rejected. Similarly, we do not find any infirmity in the findings of the Commissioner (Appeals) in setting aside the penalty on M/s. BDMC and accordingly, the Revenue s appeal for imposition of penalty is also rejected. M/s. SGP and GTC have challenged these orders for demanding duty w.e.f. 1-7-2001 under Rule 6 of the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001. We find that the Commissioner (Appeals) has not taken into consideration the provisions of V(c) of Notification No. 43/01 under which duty is payable as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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