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TMI Blog2022 (8) TMI 986X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner is a composite mill, wherein, yarn is manufactured consumed captively in manufacture of both grey and process fabrics. The process fabrics are mostly dutiable and further there is exemption from paying duty on the yarn. In view of the same, in the yarn manufacture, the portion of the same is used for export. As regards grey fabric, it is exempted for clearance, hence, duty to the yarn used for this process to be paid. This calculations can be precisely made only at the time of clearance either as grey fabric or process fabric. In the impugned order, there is no discussion about considering the report of the Deputy Commissioner of the year 2001, which is followed and orders passed by the jurisdictional Assistant Commissioner, while passing the assessment order which ought to be considered before finalizing the order in original. The matter is remitted back to the Commissioner to consider afresh the petitioner's plea from the stage of issuance of show cause notices - petition allowed by way of remand. - W.P(MD).No.12608 of 2017 And W.M.P.(MD).No.9724 of 2017 - - - Dated:- 2-8-2022 - Honourable Mr.Justice M.Nirmal Kumar For the Petitioner : Mr.J.Sankar Raman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 198 3. Since cotton grey fabrics were exempted from payment of duty, the benefit of duty exemption under Notification No.22/96-CE, dated 23.07.1996 as amended, was not available to cotton yarn removed for captive consumption for the manufacture of said fabrics. It was also alleged that in terms of Rule 49A of the erstwhile Central Excise Rules, 1944, payment of duty on yarns was deferred to the fabric stage subject to payment of interest as well as obtaining permission from the jurisdictional Commissioner as specified under the said Rule. The petitioner had replied to the show cause notice and also to subsequent notices. The petitioner paid Rs.1,37,137/- voluntarily on 17.01.2022 under protest towards interest payable under Rule 49A. The respondents confirmed the entire demand of Rs.4,06,71,198/- raised in the above six show cause notices under Section 11A(2) of Central Excise Act, 1944. Further, imposed a penalty of Rs.1,00,00,000/- on the petitioner under erstwhile Rule 173Q of Central Excise Rules, 1944 vide his Order in Original No.14 of 2002 dated 28.03.2002. Thereafter, the petitioner had filed an appeal before the Tribunal, Chennai and the Tribunal after mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e made. Further, the petitioner referring to the impugned order in the original. In a page No.11 referring to para 22 of the impugned order dated 27.03.2017, it is submitted that the adjudicating authority had recorded that any duty paid on the dutiable grey / processed fabrics is the duty payable on the fabrics and not the duty legally required to be paid at the time of removal, on the yarn removed for captive consumption. Similarly, the duty worked out on the yarn consumed in the manufacture of exempted grey fabrics, is not the duty legally required to be paid at the time of removal, on the yarn removed for captive consumption. 5. The learned counsel for the petitioner submitted that he is unable to understand what is the duty legally required to be paid and also for the wording not the duty legally required and for owing that it is not the duty legally required. The payment of duty can never be termed as as legally paid at most it can be said, belatedly paid or short paid. Finding that the petitioner have not paid the duty during clearance for the yarn contained in the grey fabric which is cleared, to work out the quantities of the yarn involved in the manufacture of grey fab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled one wherein, the Commissioner had dealt in detail all the submissions made by the petitioner and also the observations made by the CESTAT, to re-look into the contention of the petitioner, give them opportunity, on considering the submissions and records and thereafter only the impugned order passed. Further, in the impugned order, three months time granted. If the petitioner is aggrieved, he can file an appeal. Not availing the same, approaching this Court is not proper. On that score alone, this Petition to be dismissed. He further submitted that the petitioner rising the points on facts which cannot be decided in Writ Petition, the respondents filed their counter and reiterated the same in the paragraphs 3 to 6 which is extracted hereunder:- 3. It is submitted that, M/s Madura Coats Limited was composite mill manufacturing cotton and polyester yarn as well as cotton and man made fabrics. The yarn manufactured was removed on payment of duty to buyers or removed without payment of duty for captive consumption in the manufacture of fabrics. The Processed fabrics were removed on payment of duty whereas the unprocessed fabrics were exempted from duty. The cotton yarn cleared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f no consequence in respect of that order and as the main and separate issue regarding Rule 49A was pending to be decided in the SCNs by a higher authority. When the situation was like that assessee is relying on the lower authorities order to apply it to a more specific dispute raised in the notices covering the period January-2000 to December-2000. It is also pertinent to note that CESTAT has not ordered the Assistant Commissioner to decide the Rule 49A issue and directed the Commissioner to take up the issue after finalization of provisional assessment as sought for the assessee in the CESTAT. 6. It is submitted that it is true the provisional assessment has culminated in the refund of duty. But it is to be borne in mind that the provisional assessment is not only for cotton yarn but also for Non cellulosic spun yarn and therefore the refund is entirely not due to cotton yarn. Moreover, the issues covered in the notices are not comparable. While the SCN for provisional assessment is for the determination of quantum of yarn consumed and its value, the other SCNs are exclusively for the determination of duty demand for non payment of duty on removal of captive consumption at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the present case and proceed thereafter. Thus, the appeal is remanded on the above terms. 10. Thereafter, the petitioner again participated in adjudicating the proceedings before the Commissioner. In the meanwhile, the jurisdiction Assistant Commissioner finalized the provisional assessment, passed the assessment order dated 24.06.2011. Following the same, he had passed three refund orders. Admittedly, all the four orders never challenged by the department by way of revision. Now, the assessment finalized. The Deputy Commissioner in his letter of the year 2001 cleared the doubt of the department and the difficulty. Finding on the peculiar circumstances, for what reason duty levied on grey fabric can be worked out only by the reverse process. Admittedly, the petitioner is a composite mill, wherein, yarn is manufactured consumed captively in manufacture of both grey and process fabrics. The process fabrics are mostly dutiable and further there is exemption from paying duty on the yarn. In view of the same, in the yarn manufacture, the portion of the same is used for export. As regards grey fabric, it is exempted for clearance, hence, duty to the yarn used for this process t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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