9911796707
TMI Blog1995 (8) TMI 153X X X X Extracts X X X X X X X X Extracts X X X X ..... om the appellant mills, was in a finished condition and the mills were not eligible to avail of the benefit of procedure under Rule 56B of the Central Excise Rules, 1944, and as such, no permission could be granted and also confirming the demand for Rs. 7,20,140.11 by way of duty on the cotton yarn so removed, during the period from June, 1985 to December, 1985, as demanded vide Show Cause Notice, dated 6-1-1986. 2. The appellants, engaged in manufacture of cotton yarn, falling within Tariff Item 18A as also T.I. 18, 91-I and 22-I of the Excise Tariff Act, used to send cotton yarn on bobbins to another firm, vide Rule 56B of the said Rules, for reeling them on cross reel hanks, cones, plain reel hanks etc, as they had no facility avai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng demand for the removals during that period, the authority has reviewed the earlier order which could not be done, and even otherwise, there is no order for withdrawal of the permission. In his submission, the entire order deserves to be set aside on that count alone. He has pleaded that even if the order is deemed to be the one of withdrawal of permission, demand could be raised only from the date of such withdrawal of the permission and has relied upon the decisions of the Tribunal in Himadri Electrical Pvt. Ltd. v. Collector, 1987 (29) E.L.T. 140 (T). The ld. advocate has further pleaded, that the demand is raised on the assumption that the yarn on bobbins is a finished and dutiable product and reference is made to TI 18A Explanation 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Rules, and whether the duty can be demanded for the removals effected during the period when the permission granted under the said Rule was already subsisting. The duty demand is for removal during June 1985 to December, 1985 and undisputedly the permission earlier granted was valid upto 31-12-1985. 6. Vide Rule 56B of the Rules, semi-finished goods could be permitted to be removed for carrying out further manufacturing process so as to make it a complete product, whereas finished goods could be permitted removal only for the purpose of testing. 7. The same authority who has adjudicated, has, subsequent to the passing of the order-in-original, for the removal of the same item by the same party to the same party to whom the go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to manufacture and would attract duty. It is however not discussed how the loose dyed yarn would be commercially different from dyed yarn in cones. Further going by the ratio in the Supreme Court judgment in Ujagar Prints v. Union of India - 1988 (38) E.L.T. 535 (SC) as also in Siddeshwari Cotton Mills Pvt. Ltd. v. Union of India - 1989 (39) E.L.T. 498 (SC), what the said court have held is that process undertaken should be the one from where a commercially different commodity ought to emerge. The view expressed by the Madras High Court, appears to be not in full conformity with the ratio of aforementioned judgments of the Supreme Court, whereas the view expressed by the Tribunal in their order in Re : Orissa Weavers Co- op. Spg. Mills (sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the judgment of Calcutta High Court in I.T.C. that Sec. 11A and 11B are independent provisions in the Central Excise law for recovery of short levy or non levy or for refund of excess duty paid, as the case may be, notwithstanding the fact that the approved classification lists and the price lists were not appealed against, that principle cannot be applied in this case; because Sec. 11A relates to demand, where Central Excise duty has not been levied or short levied as reflected in the orders of assessment or cases of clandestine removals, for which five years is provided for recovery. Assessment is done on the basis of approved C.L. or price list. If the Department feels that C.L. approved is erroneous resulting in non levy or short le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bbins and cones and then only can be converted in blanks. When exemption is given to hanks on policy considerations of helping the handloom sector, if we are to interpret the provisions of law in the manner as pleaded by revenue, it would only frustrate the notification. It is a settled position in law that any law has to be interpreted in a manner as to give effect to the same. In this case, exemption is given to hank yarn and such hank yarn cannot be obtained straight from cotton without such yarn passing through other form such as bobbin/cones. Thus, if we are to make the exemption available in reality, the question to be asked is whether such other forms of yarn (though not exempted) could be avoided in the process of obtaining hank yar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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