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2014 (5) TMI 642 - AT - Central ExciseDuty demand - Clandestine removal of goods - Artificial segregation of the manufacturing activity - compounded levy in respect of independent processors of textile fabrics - Held that:- provisions of Section 3A were inserted w.e.f. 1997 and the appellants were directly covered under the said provisions of Section 3A of the Central Excise Act, 1944 and were liable to pay the Central Excise duty in accordance with the provisions of said Section and the rules made thereunder. On perusal of the said Section 3A, it clearly transpires that the goods which are notified under the said Section are to be levied with the Central Excise duty and the said Central Excise duty shall be collected in accordance with the provisions of this Section. The said Section 3A also starts with non-obstante law. A plain reading of the said Section would indicate that in the case of notified goods, like the goods manufactured by the assessee who is an independent processor, then the duty liability has to be discharged based on the annual production capacity which is required to be determined. Duty liability on the notified goods under Section 3A of Central Excise Act, 1944 has to be worked out as provided thereunder. Since I have already held that the show cause notice is issued on the ground that M/s Super Processors, the main person is independent processor, invoking the provisions of Section 3A would have been more appropriate than invoking the provisions of Section 3 read with Section 11A of Central Excise Act, 1944 against the appellant - entire appeal is allowed in respect of this appellant who is a sole proprietorship firm, on the ground that of non-applicability of the provisions of Section 3 of Central Excise Act, 1944 on the goods notified by the appellant - Decided in favour of assessee.
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