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TMI Blog2018 (7) TMI 1682X X X X Extracts X X X X X X X X Extracts X X X X ..... ) For Appellant (s) : Shri Paritosh Gupta, Shri Amal Paresh Dave, Advocate For Respondent (s): Shri S. N. Gohil, AR ORDER Per : Dr. D. M. Misra This is an appeal filed against OIO No. 02/Commr/CUS/VDR-ii/08-09 dt. 16.07.2008 passed by the Commissioner of Central Excise Customs, Vadodara. 2. Briefly stated the facts of the case are that the appellant an 100% EOU are engaged in the manufacture of Yarn, Shoddy Blends, Blends, Mutilated Rags, Process Waste and Clips falling under Chapter sub-heading various chapters of CETA, 1985. During the relevant period, the imported mixed woollens/synthetic rags falling under Customs Tariff Heading No. 6309.00 and manufactured mutilated rags, clips blends and waste obtained by sorting/mutilating/cutting were cleared to DTA as per the permission granted by the Development Commissioner. Alleging that these goods were not excisable since the process to which the imported mixed woollen/synthetic rags were subjected, did not amount to manufacture and also these goods did not figure in the first schedule to the CETA, 1985. They had wrongly paid the duty on the DTA clearances of mutilated rags in terms of Notification No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention that on transition 6 digit to 8 digit tariff, not new product has been added which is clear from the Circular issued by the Board bearing No. 808/5/2005-CX dated 25.02.2005. Further, he has submitted that the said Circular has been interpreted by the Hon ble Bombay High Court in the case of ECO Valley Farms Foods Ltd. Vs. CCE, Pune-III 2013 (290) ELT 49 (Bom.) . The Ld. Advocate as per the submitted that rags an excisable products as all allegation been acknowledge by the department as is evident by reading various exemption notification issued by the Board by time to time. The Ld. Advocate has submitted that rags do find place in the said notifications. Further, he has submitted that rags is an excisable commodity has been held by the Hon ble Andhra Pardesh High Court in the case of Narayan Venkat Company vs. State of Andhra Pradesh -1988 (33) ELT 327 (A.P.) and by the Bombay High Court in the case of Punjab Business and Supply Co. Pvt. Ltd. Vs. State of Maharashtra 1978 (2) ELT (J 646)(Bom.) and by the Tribunal in the case of Modi Cloth Mills, Modinagar vs. Collector of Central Excise, Meerut 1986 (24) ELT 157 (Tribunal). 4. Per contra, the Ld. AR for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay High Court in the case of ECO Valley Farms Foods Ltd. Vs. CCE, Pune-III - 2013 (290) ELT 49 (Bom.). We find force in the contention of the Ld. Advocate for the appellant. We find that rags is not a new commodity, but from time to time various exemption notifications (for instance, Notification Nos. 6/88-CE dt. 19.1.1988 and 103/93-CE dt. 27.12.1993) were issued recognizing rag as an excisable commodity. Further, in the judgement of the Bombay High Court in the case of Punjab Business and Supply Co. Pvt Ltd (supra), rag has been considered as a commodity falling under the First schedule to the Central Excise Act, 1944. Besides, the Ld. Commissioner has observed that this Tribunal has dropped the demand for the period after 01.03.2005 observing that rag has been specifically included in the 8 digit tariff. 6.1 We note that a similar dispute arose on the excisability of fresh mushrooms prior to 2004 (Amendment) Act to Central Excise Tariff in the case of ECO Valley Farms Foods Ltd (supra). In the said case, Hon'ble Bombay High Court held as under: 21. Chapter 7 of the 1985 Act as it stood prior to the 2004 (Amendment) Act to the extent relevant read thus: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oviso to Section 3(1) of the 1944 Act, the assessee was liable to pay excise duty equivalent to customs duty payable on imported fresh mushrooms. That argument of the Revenue was rejected by the Commissioner of Central Excise (A) by holding that even if fresh mushrooms were excisable and covered under Chapter 7 of the Central Excise Tariff, in view of the Nil rate of duty, the Revenue was not justified in demanding excise duty equivalent to customs duty in respect of DTA clearances of fresh mushrooms effected by the assessee. Thus, the Commissioner of Central Excise (A) while accepting the contention of the Revenue that fresh mushrooms were excisable, held that in view of the Nil rate of duty, the Revenue was not justified in demanding duty equivalent to customs duty in respect of DTA clearances of fresh mushrooms effected by the assessee, a 100% EOU. Therefore, the argument of the Revenue that the fresh mushrooms were not excisable prior to the 2004 amendment to the 1985 Act is unsustainable. 24. Moreover, the argument of the Revenue that by the 2004 amendment to the 1985 Act, fresh mushrooms were made excisable for the first time with effect from 28th February 2005 is a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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