9911796707
TMI Blog2002 (1) TMI 750X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3. Consequent upon the changes made in notes of Chapter 54 of Central Excise Tariff Act, 1985 and expansion of entries in Chapter 63 of CETA 1985 with effect from 16-3-95, sacks and bags woven from strips made out of Granules (HDPE/PP/ETC) falls under Chapter 63.05 and plastic strip of width not exceeding 5 mm have been identified as "Textile Materials" falls under sub-heading No. 5404.90 attracting duty of 16% Adv. and 15% thereof as AED (T & TA) leviable under AED (T & TA) Act, 1978. Consequently strips manufactured in a factory and consumed captively in the manufacture of final product attracts both duties unless they are exempted by virtue of any Notification. A Notification No. 67/95 Central Excise which was operative from 16-3-95 exempts only Basic Excise Duty and not Additional Excise Duty leviable under AED (T & TA) Act, 1978. Final product being sacks and bags did not attract this Additional Excise Duty at all. Therefore, Additional Excise Duty under AED (T & TA) Act, 1978 is leviable on strips falling under Chapter/Sub-heading No. 5404.90 being textile material captively consumed in the manufacture of final products. 4. The assessee manufacturing sacks and b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 11A of Central Excise Act, 1944. 6. A show cause notice was issued to the assessee on 13-3-2000 as to why :- (i) Additional Excise Duty AED (T & TA) of Rs. 19,17,821/- should not be recovered from them under Section 11A(1) of Central Excise Act, 1944 read with Rule 9(2) of the Central Excise Rules, 1944. (ii) Penalty should not be imposed upon them under Section 11AC of Central Excise Act, 1944 read with Rule 173Q(1) of Central Excise Rules, 1944. (iii) The interest at the appropriate rate should not be recovered from them under Section 11AB of Central Excise Act, 1944. (iv) The Land, Building, Plant, Machinery etc. used in connection with the manufacture, storage and removal or disposable of such goods should not be confiscated under Rule 173Q(2)(a) of Central Excise Rules, 1944. 7. A corrigendum was issued by the Additional Commissioner vide F. No. V(Ch. 39) 3-30/DEM/99, dtd. 10-8-2000 wherein the word "Section 11A (1)" in the show cause notice were amended to be read as "proviso to sub-section (1) of Section 11A of Central Excise Act, 1944". Defence Submissions :- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2-93 confirms that strips of width less than 5 mm and polysacks made therefrom are classifiable under Ch. 39. 6. Madurai Collectorate has directed vide his Trade Notice No. 35/93, dtd. 16-11-93 that, strips and tapes of width less than 5 mm shall be classified under Ch. 398 and polysacks made therefrom also under Ch. 39. 7. Bolepur Collectorate Trade Notice No. 55/94, dtd. 2-5-1994 suggests that, in terms of CBEC directive, strips and tapes of width less than 5 mm shall be classified under Ch. 39 and polysacks made therefrom, also under Ch. 39. 8. Ahmedabad Collectorate Trade Notice No. 78/94, dtd. 9-5-94 suggests that, HDPE strips and tapes of width lesser than 5 mm fabrics woven therefrom polysacks made thereafter are all classifiable under Ch. 39. 9. In 1994 (69) E.L.T. 537 to 540 CCE v. Orissa Cement Limited, the Honourable Tribunal observed, while adjudicating upon the eligibility of polysacks to Modvat credit that, it is well settled that HDPE bags/sacks were classifiable under Ch. 39 10. In 1998 (103) E.L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ased to operate with effect from 16-3-95 due to changes in the notes of Chapter 54 of Central Excise Tariff Act, 1985 and expansion of entries in Chapter 63 of Central Excise Tariff Act, 1985 with effect from 16-3-95 and since Notification No. 67/95-C.E. operative from 16-3-95 exempts only Basic Excise Duty and not Additional Excise Duty leviable under AED (T & TA) Act, 1978, and since final products, being sacks and bags, did not attract the Additional Excise Duty. 15. The Additional duty of Excise under the Additional Duties of Excise (Textile & Textile Articles) Act, 1978, is leviable at the rate of 15 % of the total excise duty (basic duty) so chargeable on such goods. In the present case the duty of excise on the excisable goods is NIL by virtue of exemption contained in Notification No. 67/95-C.E., dated 16-3-1995 and thereby duty of Additional duty (T & TA) i.e. 15 % of the total duty of excise i.e. NIL, in this case also become automatically NIL. Section 3 of the Additional Duties of excise (Textile and Textile Articles) Act, 1978 provides levy of additional duty of excise, as a percentage (15 %) of duty of excise specified in the schedule to the Central Excise Tariff ..... X X X X Extracts X X X X X X X X Extracts X X X X
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