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2013 (8) TMI 645 - AT - Central ExciseProcessing of Cotton Fabrics without the aid of power or steam - Benefit of Exemption Notification No. 111/87 - Whether the exemption Notification No. 111/87-CE would be available to assesse whose clearances for home consumption of the cotton fabrics processed without aid of power or steam in a financial year exceed 50 lakh Sq. mtr. - Revenue was of the view that the exemption would not be available to an assesse from day one – Held that:- The interpretation to the notification given by the Commissioner was incorrect and as such even if the clearances of the processed cotton fabric during a financial year exceed the threshold limit prescribed in the notification, it was only the clearances in excess of this limit which would attract duty, and crossing the threshold limit would not result in total denial of the exemption - There was no provision in the notification to the effect that the exemption would not be applicable if the aggregate quantity of clearances of processed fabrics for home consumption for one or more factories of the manufacturer during the financial year exceed the prescribed threshold limit. Unaccounted Processing of Goods - Processing of cotton fabrics without accounted on the records - Held that:- There was no reason to disbelieve the records of the other contractors - the department's allegation that in addition to the quantity of 43,31,361 L. Mtrs. of fabrics as shown in Central Excise records of the appellant firm another quantity of 3,63,213.55 L. Mtrs of fabrics was also been processed and cleared - For determination of duty on the quantity of fabrics processed and cleared in excess, the matter would had to be remanded. Goods Cleared Without Payment of Duty - Held that:- No duty was chargeable on fabrics - There was gain in the quantity due to elongation of the fabrics during stentering - Since the increase in the length of fabrics had taken place during stentering which was fully exempted process. Limitation Period u/s 11A(1) - Held that:- The fabric was processed without aid of power or steam and clearance was not reflected in the Central Excise records and was cleared without payment of duty the same had to be treated as clandestine removal and accordingly the longer limitation period under proviso to section 11A (1) would be available to the department and for the same reason penalty under Rule 173Q(1)(d) of the Central Excise Rules, 1944 would be imposable on the appellant firm - There was nothing wrong in simultaneous imposition of penalty on the Appellant firm and its partner as the two penalties are under different rules and for different contraventions - Order set aside – Matter Remanded back for re-quantification of the duty demand and also for redetermination of the quantum of penalty on the appellant firm and on partners.
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