TMI Blog2008 (7) TMI 365X X X X Extracts X X X X X X X X Extracts X X X X ..... essees, 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 Chapter 54 55 of Central Excise Tariff Act. The assessees were issued notices by the Joint Commissioner, as in the opinion of the said authority, the assessee has not paid central excise duty amounting to Rs. 7,57,266/- on clearance of 84407.50 meter of man made fabrics, cleared after 1-3-2001. 4. The necessary allegations were, that prior to 1-3-2001, the assessee was paying central excise duty on the said man made fabric under 'Compounded Levy Scheme' in accordance with the notifications in force from time to time, including the one dated 1-3-2000. Since 1-3-2001 the 'Compounded Levy Scheme' was withdrawn, and duty on ad valorem basis was levied. On account of this change, the assessee declared the st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , admittedly the quantity of processed fabric under dispute was entered in RG-1 after passing through the stenter, and lying in decatis ing machine - TMT/KD, Zero Zero 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 of fabric which passed through and processed on the stenter machine upto mid night of 28-2-2001, was undisputedly covered under the 'Compounded Levy Scheme' and the duty was deemed to have been paid thereon, as such no duty can be claimed on that stock. It was contended, that the stock was physically verified on 28-2-2001 at 24.00 Hrs, and also the two stocks of fabrics, and they had also given a letter to the Assistant Commissioner mentioning that 86341.00 meters of finished goods were lying in their process house, for OD/TMT/Zero Zero finish/Folding, and this has not been entered in RG-1 on 28-2-2001, but it was completed from stentering process, for which duty had already been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 was set aside, on the ground, that the issue involved being one of the interpretation, no penalty is imposable. 8. The appeals were admitted by framing the following substantial questions of law:- "(i) Whether in the facts and circumstances of the case the Duty under Section 3A of the Central Excise Act, 1944 read with Rule 96ZQ of the Rules of 1944 was leviable on the duty payable under Stenters Rules at the stage of finishing process? (ii) Whether change of law w.e.f. 1st March, 2001 brought change in respect of Duty which became payable and paid until 28th Feb., 2001?" 9. Assailing the impugned orders, the learned counsel for the assessee reiterated the submis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der 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, 54.06, 54.07, 55.11, 55.12, 55.13 or 55.14, or processed textile fabrics of cotton or man made fibers, 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 was required to pay excise duty, dependent on its production capacity, as assessed under the Rules of 2000, and at the rate prescribed under Rule 96ZQ of the Rules of 1944, and was to pay duty specified therein; meaning thereby, that if the assessee manufactures textile fabric, as falling under either of the aforesaid sub headings, its liability arises as above. 13. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing, 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 noticed, that the sub heading covered is 55.13 as a whole, and not any sub part thereof. 18. In view of the above, a bare reading of Heading 55.13 shows, that it covers other woven fabrics of synthetic staple, and its sub-heading 5513.10 covers fibres 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. Thus, if the fabric is subjected to any one or more of these processes, it would fall under sub-heading 5513.10. 19. To put it more clearly, or in other words, in order to fall under sub-heading 5513.10, it is n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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