2002 (12) TMI 474

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..... Respondent. [Order per : C.N.B. Nair, Member (T)]. -  The appellants manufacture Emulsifiers from captively produced exempted Organic Surface Active Agents. The issue that arises for consideration in this appeal is whether the emulsifiers so produced were entitled to exemption under Notification No. 101/66-C.E., dated 17-6-1966. The Commissioner held that the exemption was not available to .....

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..... nt of duty of Excise or the additional duty under Section 3 of the Customs Act has already been paid. In the Appellant's case they have paid NIL rate of duty vide Notification No. 175/86-C.E., dated 1-3-86 as amended. In other words, the basic material used for manufacture of so-called Emulsifier has not suffered duty as required under Notification No. 101/66. It is, therefore, obvious that the ba .....

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..... rcular No.  125/36/95-CX, dated 15-5-95. 3.  It is well settled that the departmental authorities are bound by the circular issued by the Central Board of Excise & Customs [2002 (139) E.L.T. 3 (S.C.)]. It is clear from the Circular dated 15-5-95 and the earlier circular that even if inputs are exempted from excise duty, the exemption on the finished goods cannot be denied on that ground .....

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..... om yarn on which appropriate excise duty has been paid. Similarly, Notification No. 28/95-C.E., dated 16-3-1995 exempts twine, cardage, rope etc. made from duty paid yarn, monofilament yarn. The above illustrations are not exhaustive, and there are similar other notifications as well. 3. Board has issued instructions from time to time that in such cases, even if the inputs are exempted from .....

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..... 4.  It is clear from the above circular that Board was, for long, of the view that exemption was available even if the goods in question are produced from exempted goods. The duty demand against the appellants is contrary to the circulars of the Board on the subject. Such a demand cannot be sustained. The appeal is, accordingly, allowed after setting aside the impugned order.
Case laws, D .....

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