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TMI Blog1997 (5) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... n 11 of the Central Excises and Salt Act, 1944 (briefly `the Act'). 4.By the impugned notices, the petitioners were called upon to show cause as to why duty on rubberised cotton fabric be not levied under Section 11A of the Act. 5.The contention of the petitioners is that petitioner No. 1 - a company duly incorporated under the Companies Act, 1956 - is engaged in the manufacture of rubber beltings and allied rubber products, that during the course of manufacturing of rubber beltings, an item called 'rubberised cotton fabric' which is also known as 'friction cloth' in technical parlance, comes into existence and is captively consumed by the company in the manufacture of its and product; that rubberised cotton fabric - an intermediary pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... follows :- "Under Section 2(d) of the Act, excisable goods have been defined to be goods specified in First schedule as being subject to a duty of excise. It is provided in Section 3 of the Act that excise duty on all excisable goods which are manufactured in India shall be levied at the rates set forth in the First Schedule. According to Item No. 19 of this schedule, cotton fabrics subjected to process mentioned therein are liable to excise duty at the rate of 25 per cent ad valorem. The goods manufactured by the petitioners viz, transmission belting V shaped belts, etc. are liable to excise duty at the rate of 24 per cent ad valorem under Item No. 16 of he First Schedule. It is manifest from a reading of the above statutory provisions c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... berised cotton fabric is cleared for captive consumption in different items and is being consumed as such and that according to amended Rule 9 the rubberised cotton fabric should be cleared on payment of duty under Tariff Item No. 19-I(b). In South Bihar Sugar Mills Ltd. and Another v. Union of India and Another etc. - 1978 (2) E.L.T. (J 336) (S.C.) = A.I.R. 1968 S.C. 922 adverting to Rules 9 and 49 of the Rules, the Apex Court said as under :- "Since this intermediary products is not an excisable article in itself, the amendments by way of explanations introduced in Rules 9 and 49 of the Rules do not change the situation. These two explanation only make those intermediary articles liable to excise duty which independently fall within the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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