2004 (7) TMI 401

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..... , SDR, for the Respondent. [Order per : K.C. Mamgain, Member (T)]. - This appeal is against the Order-in-Appeal No. 67/2001, dated 27-11-2001 passed by the Commissioner of Central Excise (Appeals), Hyderabad-I. 2. Shri G. Mohan Rao, Advocate, appeared for the appellants. He pleaded that the appellants had applied to the Superintendent of Central Excise for permission to remove Spaghetti f .....

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..... essing are not liable for duty. He relied on the following decisions : (i) U.P. State Sugar Corporation Ltd. v. CCE, Allahabad - 2001 (137) E.L.T. 948 (Tri. - Del.) (ii) Bharat Earth Movers Ltd. v. Collector of Customs, Madras-I - 2001 (129) E.L.T. 580 (Mad.) (iii) R.B. Narain Singh Sugar Mills Ltd. v. Collector of Central Excise, Meerut - 1996 (82) E.L.T. 588 (Tribunal) (iv) Cadila Laboratori .....

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..... learned SDR appearing for Revenue, stated that the appellants had removed Spaghetti for re-processing and instead of manufacturing Spaghetti out of it, they manufactured Vermicelli. Spaghetti is chargeable to duty whereas Vermicelli is exempt from duty. Therefore, if Spaghetti is used in the manufacture of Vermicelli, then they have to pay the duty on Spaghetti. He also stated that from the lette .....

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..... les, 1944, the appellants are required to discharge duty liability in case of goods removed for captive consumption; unless there exists an exemption notification for captive consumption. He said that since the appellant have not paid the duty on Spaghetti, which they could not market, and removed it for re-processing and used it in the manufacture of Vermicelli, which is chargeable to nil duty, t .....

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..... e 9 read with Rule 49 of the Central Excise Rules. As Spaghetti was cleared within the factory and such clearance was not exempt from duty if it is used in the manufacture of goods, which are chargeable to nil rate of duty or exempt from duty, it should suffer duty. The decisions relied upon by the appellants are not relevant to the issue. The Commissioner has correctly decided the issue. We, ther .....

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