TMI Blog2000 (7) TMI 606X X X X Extracts X X X X X X X X Extracts X X X X ..... he show cause notice dated 22-7-1996 demand of Rs. 6,27,599.68 and Rs. 1,25,520/- was made. Penal provisions were also invoked. Both the show cause notices were adjudicated by the Commissioner of Central Excise, Indore, who with regard to show cause notice dated 4-12-1995 confirmed the demand of Rs. 15,02,211.18. A penalty of Rs. 5 lakh was imposed. With regard to the second show cause notice dated 22-7-1996, duty of Rs. 7,21,739.63 was confirmed. In addition, a penalty of Rs. 2,50,000/- was imposed. 3. The matter was heard on 12-6-2000 when Shri G. Shiv Das, Advocate, appearing for the appellants, submitted that the cotton waste was not a manufactured product and there was no provision regarding the removal of waste cotton to the DTA in the import schedule. The cotton waste is not taken into account while determining the obligation of the 100% EOU. He also submitted that the 1995-96 Finance Bill was enacted on 26-5-1995 and thus no levy could be imposed prior to that date. In any case there was no duty on cotton waste after 31-7-1995 as exemption has been granted vide Notification No. 105/95-C.E., dated 1-8-1995. He referred to the presence of the central excise officers in thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te and garnetted stock) 5202.10 - Yarn waste (including thread waste) - Other : Nil 5202.91 -- Garnetted stock Nil 5202.99 -- Other Nil 52.03 5203.00 Cotton, carded or combed Nil 52.04 5204.00 Cotton sewing thread 20% 52.05 Cotton yarn (other than sewing thread), containing 85% or more by weight of cotton - In or in relation to the manufacture of which any process is ordinarily carried on with the aid of power: 5205.11 -- Single yarn 20% 5205.19 -- Multiple (folded) or cabled yarn 20% 5205.90 - Other Nil 52.06 Cotton yarn (other than sewing thread), containing less than 85% by weight of cotton - In or in relation to the manufacture of which any process is ordinarily carried on with the aid of power: 5206.11 -- Single yarn 20% 5206.12 -- Mult ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to as the 'Act of 1931'). Clause 80 of the Bill provided as under: 80. Amendment of Act 5 of 1986 - The Central Excise Tariff Act, 1985 (hereinafter referred to as the Central Excise Tariff Act) shall be amended in the manner specified in the 4th Schedule. By virtue of the declaration under the Act of 1931, Clause 80 was given immediate effect. The declaration under the Act of 1931 read as under- It is hereby declared that it is expedient in the public interest that the provisions of sub-clause (a) of Clause 69, Clause 80 and Clause 81 of this Bill shall have immediate effect under the Provisional Collection of Taxes Act, 1931 (16 of 1931). Under Section 3 of the Act of 1931, where a Bill to be introduced in Parliament on behalf of Government provides for the imposition or increase of duty of customs or excise, the Central Government may cause to be inserted in the Bill, a declaration that it is expedient in the public interest that any provision of the Bill relating to such imposition or increase shall have immediate effect under that Act. The provision in a Bill in respect of which a declaration has been made under Section 3, aforesaid, was considered t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cisable goods was to be determined in accordance with the customs law. It has been clarified under Section 5A of the Act that unless specifically provided in any notification, issued under sub-section (1) of Section 5A of the Act, no exemption therein was to apply to excisable goods which were produced or manufactured by a 100% EOU and allowed to be sold in India. Under Notification No. 2/95-C.E., dated 4-1-1995, excisable goods produced or manufactured in a 100% EOU and allowed to be sold in India were exempted from so much of the duty of excise leviable thereon under Section 3 of the Act as was in excess of the amount calculated at the rate of 50% of each of the duties of customs which would be leviable on the like goods produced or manufactured outside India if imported Into India. As the rate of customs duty on import of cotton waste was 25% (refer Notification No. 40/93-C.E., dated 28-2-1993), the applicable rate came to 12.5% ad valorem. In the case of Pacific Granites Ltd. v. CCE, Jaipur, Order No. 1298/99-A dated 14-9-1999 [1999 (114) E.L.T. 917 (Tribunal) in Appeal No. E/1765/97-A with regard to the removals of goods by 100% EOU, the Tribunal agreed with the Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esses, such as, carding, combing etc. towards yarn making. Further, there is a separate entry for cotton carded or combed (Heading No. 52.03). Thus the cotton waste is as per the tariff different than cotton carded or combed. In fact, against Heading No. 52.01 cotton not carded or combed has also been described. The scope of the entry under Heading No. 52.02 had thus to be understood with reference to the structure of the tariff under Heading No. 52.01, No. 52.02 and 52.03. It has been held in a number of decisions that when the process was described by the Legislature itself as a process of manufacture, there could be no doubt about the manufacture as per provisions of Section 2(f) of the Act (refer para 7 of the UOI v. Hindu Undivided Family Business Known as Ramlal Mansukhrai, Rewari, 1978 (2) E.L.T. (J 389); also refer Sriniwasa Metal Indus. Regahmundry v. CCE, Guntur, 1987 (30) E.L.T. 578 (T). The scope of Heading No. 52.02 has been explained in the Explanatory Notes to the Harmonized Commodity Description and Coding System (HSN) at pages 729-730. It is explained that in general this heading covers waste cotton obtained when cotton is prepared for spinning or during operatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cotton waste cleared to DTA by 100% EOU. The appellants reliance on the Tribunal's decision in the case of Raja Ram Brothers v. CCE, Indore, 2000 (116) E.L.T. 649 (T) is misplaced. The issue in that case was, whether spent activated carbon was leviable to central excise duty and whether it was classifiable under Heading No. 38.23 of the Tariff which applied to residual products of the chemical or allied industries which were not elsewhere specified or included. The appellants were manufacturing liquid glucose and dextrose monohydrate; activated carbon was one of their inputs. The spent activated carbon was claimed to be a rubbish or admixture of the inputs, namely, activated carbon, bentonite earth, hyflow spuercell, resin, soda ash and caustic soda. Following the Supreme Court decision in the case of UOI v. Indian Aluminium Co. Ltd., 1995 (77) E.L.T. 268 (SC), the Tribunal held that the spent activated carbon was a rubbish. Herein the goods are specifically described in the tariff. By no stretch of imagination they could be considered as rubbish. 10. On limitation also, we agree with the view taken by the adjudicating authority. In the show cause notice dated 4-12-1995 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of manufacture and thus the asbestos fibre was not excisable to central excise duty. In the case of Punjab Wool Combers Ltd. v. CCE, Chandigarh, 1994 (71) E.L.T. 844 (T), the scoured wool was obtained by process of removal of greasy matter from raw wool by using hot water, soap etc. The Tribunal had observed that it was not a new or different product and was not dutiable under Item No. 68 of the erstwhile central excise tariff. Similarly, in Raj Woollen Indus. v. CCE, 1996 (87) E.L.T. 691 (T), the duty liability on scoured wool was involved. In Hada Textile Indus. Ltd. v. CCE, 1999 (108) E.L.T. 196 (T), the duty liability on the laps of staple fibre produced by cleaning and compressing the said fibre was involved. In Premier Tyres Ltd. v. CCE, Cochin, 1998 (99) E.L.T. 415 (T), the goods involved were mutilated tyres, tubes, flaps, rubberised fabric cut pieces, scrap rubber compound, floor sweepings, bead cuts from tyres and rubberised bead pieces arising during the course of manufacture. The Tribunal observed that they were in the nature of scrap and could not be considered as manufactured items. In the case of Ahmedabad Mfg. Calico Ptg. Co. Ltd. v. CCE, Ahmedabad, 1994 (3) RLT 72 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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