New User   Login      
Tax Management India .com TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (5) TMI 975 - CESTAT CHENNAI

2015 (5) TMI 975 - CESTAT CHENNAI - 2016 (332) E.L.T. 135 (Tri. - Chennai) - Denial of MODVAT Credit - benefit of Notification No. 5/99-CE dated 28.02.1999 vide Sl.No. 137, which exempts yarn subjected to process of winding with or without the aid of power and on which duty has been paid and the process of doubling the yarn is undertaken in a continuous process - Held that:- Appellants are bringing duty paid single yarn and undertaking the process of winding and twisting and doubling the yarn, a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ppellants claim the benefit of Sl. No. 130 of the Notification No. 5/99 which exempts multiple or cabled yarn manufactured in a factory which does not have the facilities for producing single yarn. We find that the Apex Court in the case of Swastic Rayon Processors (2006 (11) TMI 31 - SUPREME COURT OF INDIA), has held that twisting and doubling of yarn does not amount to manufacture and the yarn continues to be yarn.

As the appellant has received only duty paid single yarn and carrie .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

or the exemption under the Notification No. 5/99. Since the appellant is eligible for the exemption under the above notification, the question of availing of MODVAT Credit on the inputs does not arise - Decided in favour of assessee. - E/1081/2004 - Final Order No. 41428 / 2015 - Dated:- 19-5-2015 - Shri R. Periasami, Technical Member And Shri P.K. Choudhary, Judicial Member For the Petitioner : Shri Sujith Kumar, Adv., For the Respondent : Shri K.P. Muralidharan, AC (AR) ORDER Per: P.K. Choudha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hey were receiving duty paid dyed cotton single yarn and undertaking the process of winding the same after doubling and twisting the yarn and claimed the benefit of Notification No. 5/99-CE dated 28.02.1999 vide Sl.No. 137, which exempts yarn subjected to process of winding with or without the aid of power and on which duty has been paid and the process of doubling the yarn is undertaken in a continuous process. When the duty paid single yarn undergoes the process of doubling and twisting in the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

gle yarn from the suppliers and converting it into double yarn in their TFO machine and clear the same without payment of duty. Vide OIO No. 6/2001 dated 21.03.2001, the adjudicating authority demanded duty of ₹ 13,03,841/- and imposed a penalty of ₹ 15,000/- under Rule 173 Q. The claim for Modvat credit made by the appellant was also rejected on the ground that the appellant had not followed the procedure while availing the credit. 3. The Ld. Commissioner (Appeals) in the impugned o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

8377; 3,20,693/-. Hence, the present appeal. 5. The Ld. Counsel on behalf of the assessee Shri Sujith Kumar, reiterated the grounds of appeal and relied on the decision in the case of CCE, Hyderabad Vs. Sr. Raja Rajeshwara Co.op. Spinning Mills Ltd. - 2004 (170) ELT 350 (Tri.-Bang.), wherein it has been held that singly ply yarn continue to remain single ply and no new product come to existence and merely because of the process of winding on the cops, the goods do not become different. He furthe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he second schedule to the CETA, 1985 (5/86) or as the case may be, the additional duty leviable under Section 11 of the Custom House Act, 1975 (51/1975), has already been paid. Since the duty paid on single yarn is being subjected to the process of winding, the same is squarely covered by Sl. No. 137 of Notification 5/99. The Ld. Counsel relied on the following decisions in this regard. 1. New Shorrock Mills Vs. CCE, Vadodara 2006 (202) E.L.T. 192 (Tri. - LB) 2. CCE, Mumbai Vs. Swastik Rayon Pro .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

yarn through TFO machine; that the final process done on the yarn was only winding and the cone yarn received would be cleared in the cone form only after the process of winding; that the yarn had been purchased from M/s. S.P. Mills by M/s. Arthanari Loom Centre, Salem after payment of duty; that the yarn was subjected to the process of dyeing in the premises of M/s. Arthanari Loom Centre and then supplied to them for the process to be undertaken by them; that the yarn so received was first subj .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the TFO machine is built in modular sections and contains Drive Pulley, Foot rest, Jockey Pulleys, Inner Pot, Spindle, Jockey Pulley lever, Intermediate Frame, Top sheet, Pro-takeup Roller, Take-up Roller, Cradle Handle, Top tray and spindle tape and this machine is not meant for winding but it is specifically manufactured for twisting operation only. There is no evidence on record to show that after the twisting operation in this TFO machine, they are doing the process of winding by using Cone .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the following case laws:- 1. Aditya Mills Ltd. Vs. UOI 1988 (37 ELT 471 (S.C.) 2. Bhilwara Synthetics Ltd. Vs. CCE, Jaipur 2002 (143) ELT 22 (S.C.) 7. Heard both sides and on perusal of the records we find that the appellants are bringing duty paid single yarn and undertaking the process of winding and twisting and doubling the yarn, and counts wound in a cone in one integrated process and claimed the benefit of Notification No. 5/99 dated 28.02.1999 vide Sl.No. 137. The decision relied upon by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

arn. We find that the Apex Court in the case of Swastic Rayon Processors (supra), has held that twisting and doubling of yarn does not amount to manufacture and the yarn continues to be yarn. The relevant portion of the said decision of the Hon ble Supreme Court is reproduced as under:- 6. Counsel appearing for the revenue strenuously argued that this Court has taken contrary views in two different sets of cases. He has referred to Porritts & Spencer (Asia) Ltd. v. Collector of Central Excis .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

& Wvg. Mills Ltd. reported in 1993 Supp. (1) SCC 420(II) and C.C.E., Calcutta v. Bowreah Cotton Mills Ltd. reported in (1997) 11 SCC 106 which are in favour of the revenue. 7. The point involved in this appeal has specifically been dealt with by this Court in Porritts & Spencer (Asia) Ltd. (supra) which held that doubling or multi folding of yarn does not result in the emergence of a new commodity and that the yarn continues to be yarn and, therefore, this process does not amount to manu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version