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TMI Blog2008 (7) TMI 417X X X X Extracts X X X X X X X X Extracts X X X X ..... f 2000, at the stage, when one or more processes quoted above were completed, and did not stand deferred to await the finishing processes, like decatising, folding or packing. Thus, we do not find the impugned orders to be sustainable at all. So far question no. 2, as framed, is concerned, that, in our view does not arise, as it is nobody's case, that the change of law w.e.f. 1-3-2001, brought any change in respect of duty becoming payable and paid till 28-2-2001. Appeal allowed. - 10 of 2005 and 7 of 2006 - - - Dated:- 10-7-2008 - N.P. Gupta and Kishan Swaroop Chaudhari, JJ. [Order]. - These two appeals involve common factual matrix, though relate to two different assessees, and have been filed against different orders of the learned authorities below. However, they have been admitted by framing identical questions of law, and do involve common question of law, and are, therefore, being decided by this common order. 2. For the sake of convenience we take the facts of Appeal No. 10/2005. 3. The facts of the case are, that the assessees are process houses, engaged in the manufacturing, and processing of man-made fabrics, falling under Chapters 54 and 55 of Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at since 16-12-1998 onwards "the processed textile fabric" manufactured was subject to levy of Central Excise duty under the 'Compounded Levy Scheme', to be assessed on the basis of number of chambers of Hot Air Stenter, and the average value of the processed textile fabric, under the "Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules", which requires certain formalities to be completed by manufacturer. Under the said Scheme, a textile fabric would be deemed to have been manufactured, as soon as it emerges out of stenter machine, or any machine whatsoever, which aids to the process of heat setting or drying of fabric, and since in the present case, admittedly the quantity of processed fabric under dispute was entered in RG-1 after passing through the stenter, and lying in decatising machine- TMT/KD, Zero Zero and folding machine. Under Annual Capacity Determination Rules, duty was paid on the fabric which undergoes the process of heat setting or drying of fabric on a Hot Air Stenter, and any process undertaken thereafter need not found to be the basis of determination of Annual Capacity under the Rules. Thus, according to the assessee, the quantity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 1-3-2001 only, and therefore the same was to be cleared on payment of duty at ad valorem rate. 6. Appeal was filed against this order, and the learned Commissioner endorsed the finding, by holding, that the impugned fabrics had not reached at the final stage, and were lying for carrying out certain other processes, like decatising, folding and packing etc. at the time when the 'Compounded Levy Scheme' was withdrawn, and all the remaining processes, on the said unfinished fabrics were done by the assessee after 1-3-2001, to make the same as 'processed textile fabrics', a finished product. 7. Further appeal was filed before the learned Tribunal, and the learned Tribunal found, that the duty is imposed on the processed textile fabrics, and that, unless and until all the fabrics is ready after carrying out all the required processes, it cannot be regarded as "processed textile fabrics", and that, admittedly the process of decatising and folding have not been undertaken on the fabrics in question by 28-2-2001, the said fabrics cannot be said to have suffered the duty under Section 3A of the Central Excise Act. Thus, the impugned order was confirmed. Of course, the levy of penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fibres, falling under heading Nos. or sub-heading Nos. 58.01, 58.02, 5806.10, 5806.40, 6001.12, 6001.22, 6001.92, 6002.20, 6002.30, 6002.43, or 6002.93 of the First Schedule to Central Excise Tariff Act, 1985, shall debit an amount of duty of Rs. 2.0 lakhs per chamber per month, Rs. 2.5 lakhs per chamber per month, Rs. 3.0 lakhs per chamber per month or Rs. 3.5 lakhs per chamber per month, as the case may be, on the annual capacity of production, as determined under the said Rules of 2000. According to sub-rule (2) of the said Rule, the amount of duty payable under sub-rule (1) shall be debited by the independent processor in the account, current maintained by him under sub-rule (1) of Rule 173G of the Central Excise Rules, 1944. Then, as per sub-rule (3) Fifty per cent of the amount of duty payable for a calendar month under sub-rule (1) shall be paid by the 15th of the month, and the remaining amount shall be paid by the end of that month. Thus, a combined reading of Rule 2 of the Rules of 2000, and Rule 96ZQ of the Rules of 1944, does clearly show, that in cases, where the assessee is an independent processor of textile fabric, falling under heading Nos. 52.07, 52.08, 52.09, 54. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of manufacture, which manufacture is complete after cut-off time, then obviously it cannot be said, that any duty has been paid, and obviously the assessee shall be liable to pay excise duty on ad valorem basis. 16. In view of the above, we may refer to relevant sub-heading. In the present case the item concerned falls under sub-heading no. 55.13, which reads as under :- "(1) (2) (3) (4) (5) (6) 55.13 Other Woven Fabrics of synthetic staple fibres 5513.10 - - Not subjected to any process Subjected to the process of bleaching, dyeing, printing, shrink-proofing, tentering, heat-setting, crease-resistant processing or any other process or any one or more of these processes : 8% Nil - 5513.21 -- Bleached woven fabrics 8% 8% - 5513.22 -- Dyed woven fabrics 8% 8% - 5513.23 -- Printed woven fabrics 8% 8% - 5513.29 -- Other woven fabrics 8% 8% -" 17. Reverting once again to Rule 96ZQ, and Rules of 2000, it may be notice ..... X X X X Extracts X X X X X X X X Extracts X X X X
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