TMI Blog1999 (11) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellants and conducted an enquiry. It was observed that the appellants were purchasing Monofilament Yarn of 2000 and above denierage as well as Polyester Yarn and were manufacturing Narrow Woven Fabrics. They were manufacturing Zip fasteners (Slide fasteners and parts thereof). They were taking Modvat credit of duty paid on Polyester Monofilament Yarn and Polyester Yarn. The appellants were claiming the benefit of Notification No. 1/93, dated 28-2-1993. Zip fasteners were fully exempted from payment of Excise Duty. Prior to 1-3-1994, Narrow Woven Fabrics were also exempted from CED under Notification No. 316/86. However, Excise Duty on Narrow Woven Fabrics @ 15% Adv. came into existence w.e.f. 1-3-1994. The Department alleged that avail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds without the cover of Gate Pass/Invoices. It was also alleged that on scrutiny of Sale-Purchase Ledger for the period June, 1994 to August, 1994, the appellants had cleared 6127.98 kgs. of Narrow Woven Fabrics valued at Rs. 15,31,995/- involving CED of Rs. 2,29,799.25 for captive consumption in the manufacture of Zip Rolls without observing the procedure as laid down in Central Excise Rules. It was, therefore, alleged that even after obtaining Central Excise Registration, the appellants had cleared goods for captive consumption without payment of duty and without observing other formalities. Statement of Shri Ajay Gupta, Managing Director was also recorded. A SCN was issued to the appellants asking them to explain as to why duty should no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidering their submissions and the case law concluded as indicated in the preceding paragraph. 4. Arguing the appeal Shri Bipin Garg, Ld. Counsel submitted that the issue involved in this case is whether Explanation VI to Notification No. 1/93 has correctly been read by the authorities below. He submits that Explanation VI provides that in case the inputs and the final product are specified under Notification No. 1/93, the value of such goods shall not be taken into consideration if the inputs are used for further manufacture of the goods within the factory of production. He submitted that the inputs in their case were first converted into fabrics and fabrics were then converted into Zip fasteners/Slide fasteners. He submits that both t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in view of the above submissions, there was no demand liability arising and therefore, penalty was not warranted. He, therefore, prayed that the appeal may be allowed. 5. Ld. DR reiterated the findings of the authorities below. 6. We have heard the rival submissions. We have also perused the case law. We have also perused the evidence on record and the findings of the authorities below. We note that Explanation VI is relevant while computing the aggregate value of clearances for purpose of exemption under Notification No. 1/93. We find in the instant case that both the inputs as well as the final product were exempt during the relevant period, therefore, the Narrow Woven Fabrics captively consumed for manufacture of Zip fasteners ..... X X X X Extracts X X X X X X X X Extracts X X X X
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