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TMI Blog2005 (5) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... ule 96E of Central Excise Rules and after investigation, they were charged that they have cleared 323487.60 kgs. of processed cotton yarn without payment of duty under the said Rule during the period October, 1998 to November, 2000 to their subsidiary units viz. GEETTEAN, M/s. GTN Textiles Ltd., Doubling unit and M/s. GTN Textiles Ltd., Medak Unit and other domestic units. The processed cotton yarn was sent to M/s. GEETTEAN, Doubling unit, Medak unit for the purpose of Knitting, Twisting and Rewinding respectively. The appellant filed their reply to the Show Cause Notice and contended as follows which is recorded in Para 12 of the impugned and the same is extracted herein below : 12. Assessees have furnished reply to the Show Cause Notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed along with their reply dated 24-1-2003. (b) With reference to Doubling unit, the total qty of 1,23,680.74 kgs was received back after processing and the same were shown in their monthly returns. (c) With reference to Medak Unit and others, out of a qty of 18665.52 Kgs sent, 6309.66 kg was cleared locally after processing on payment of duty, or for export and a qty of 7879 kgs was received back. Out of the balance qty of 4480.44 kgs, 957.80 kg was exported 44 kg was sold as waste and samples, incurred process loss of 79.46 kg, and received back 3399 kg from their Nagpur factory under AR 3A No. 006/2000 and Invoice No. L53, dated 26-4-2000. The detail of reconciliation of quantities sent to the other units, furnished by the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the department and requested not to invoke penal provisions under Section 11AC or under 173Q of C.E. Rules. 2. The Commissioner considered the question as to whether the unit engaged in the clearance of processed cotton yarn manufactured under Rule 96E of C.E. Rules and the units engaged in the processing of such yarn received qualify as "factory" for the purpose of availing the benefit of duty exemption or otherwise. After quoting Rule 96E, he has held that the other two units to whom the cotton yarn was supplied do not qualify as a "factory" under Rule 96E(2) and, therefore, the demands are required to be confirmed. 3. The assessee had also submitted that out of the total quantity of 1,81,141.34 kgs. of cotton yarn sent to M/s. GEETTEAN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one unit of assessee used captively for manufacture of export goods does not attract duty in terms of Board's Circular No. 15/89, dated 6-3-1989 and 105/16/95-CX., dated 2-3-1995 in terms of Rules 12 and 13 of C.E. Rules. He also relied on the judgment of the Apex Court in the case of Thermax Private Ltd. v. CC - 1992 (61) E.L.T. 352 (S.C.) wherein also it has been held that the benefit of Rule 192 of C.E. Rules is available to manufacturers as well as importers once the stipulated nature and use of the goods are satisfied and the user holding an L-6 Licence/C.T. 2 Certificate. He also relied on the judgment of the Tribunal rendered in the case of Gangotri Textiles Ltd. v. CCE, Pune - 2005 (179) E.L.T. 580 (Tri. - Mumbai) wherein the benefi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be barred by time when the goods are cleared from one unit to another unit of the same assessee and all the details have been declared. He also relied on the judgment rendered in the case of Sri Venkatesa Mills Ltd. v. CCE, Coimbatore - 1996 (87) E.L.T. 170 (Tribunal) wherein permission was granted to transfer cotton yarn to five units for conversion into hanks in terms of Rule 96E and demands raised for larger period was set aside. It is his contention that 95% of the knitted fabric made from the cotton yarn was exported on payment of duty by the appellants from the premises of GVL and the rest of the knitted fabric was sold in the domestic market on payment of duty. He submitted that the clearances were made during the period 1998-1999, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . After due consideration, we are of the considered opinion that all the units belong to the same manufacturer and such removals under Rule 96E does not require payment of duty. The appellants had been filing declarations and had been following AR-3As procedure. 95% of the goods are also exported. Therefore, in terms of the citations relied and quoted supra, the question of demanding duty in respect of goods, which are exported, does not arise and moreover the goods which are removed to domestic units have been cleared on payment of duty. It is further seen that the appellants have been informing the department by filing AR-3As and invoice-cum-delivery challans for each removal of cotton yarns under Rule 96E and it has been countersigned by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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