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Fabric cut into Dhoties no manufacture confirms the Supreme Court.

Central Excise - By: - CADEV KUMAR KOTHARI - Dated:- 30-7-2016 Last Replied Date:- 1-8-2016 - Rule 12(B) of C.E. Rules. Circular No. 557/53/2000-CX dated 03.11.2000, Commissioner of Central Excise, Cochin Versus M/s. Kitex Ltd. 2016 (7) TMI 1075 - SUPREME COURT As discussed later on this is again a case of un-necessary litigation by revenue. In this case first of all appeal should not have been preferred, even if it was preferred, a case status report should hav .....

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ase high cost could have been awarded in favour of respondent, however, no cost was awarded. Such un-necessary litigation must be avoided and in case of need appeals by revenue should be withdrawn to avoid brain drain. Cloth cut into different kind of pieces: Cloth is manufactured in long length. Some standard sizes of length of different type of cloth is prevalent at stage of manufacture. These are called THAN in trade. Even traders who purchase cloth in THAAN .....

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these can be for men called Dhoti, for women (called saree-dhoti). Pant/ trouser pieces. Shirt pieces. Safari suit pieces. Suit pieces. Salvar Suit pieces. Kurti pieces. Blouse pieces. Saaya/ Petticoat paces. Handkerchief (Rumal pieces). Scrubber cloth. Mop cloth for manual cleaning and also for use in vacuum cleaners for domestic use. Mop cloth for manual cleanin .....

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Value addition is not because of manufacture but because of selling in smaller quantity- a trading aspect and not manufacturing aspect. These activities should not even be deemed as manufacturing. Because under law also some ground realities must be recognized and law should not be amended or designed simply to maximize revenue. The case before the Supreme Court: In the case of Kitex Ltd. (Supra) the revenue has challenged the order of Tribunal before the .....

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s: Therefore, when the job worker returns the processed goods to the appellants, that amounts to clearance and the duty liability crystallizes at that stage. As per the Board's clarification and the circular issued, the valuation is done on the basis of the principles enunciated in the Ujagar Prints case. That means the value to be adopted for payment of duty is basis of the raw materials cost plus the job charges. After receiving the materials, the appellant simply cuts them and .....

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f the goods sold by the appellant. That is completely against the provisions of Rule 12B read with Board's Circular. Therefore, the major demand amounting to ₹ 46 lakh cannot be sustained. From reading of the above order of tribunal it is clear that the Tribunal has found factually that there was no manufacture. Furthermore Tribunal has also found that the liability was correctly discharged in terms of the relevant Rule and Circular and Tribunal also followed judgment of th .....

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nd status report should have been prepared. From the reported judgment we do not find a single word spoken by counsels for revenue. Therefore, it was a fit case for withdrawal of appeal by revenue so that lot of time of honourable Supreme Court could have been saved. But in that case counsels would not have earned fees as they could by presenting themselves in team of five learned senior counsels. This only indicates that personal interest is considered of prime importance .....

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y litigation initiated by government and its authorities. Though that would not be in interest of author himself also, but author feels that we must avoid wastage of human resources, if there is no such litigation, there will be no brain drain. An intelligent person with zeal to work will definitely find more productive work, then litigation. Unfortunately unproductive work like such litigation is more remunerative than jobs of scientists, doctors and engineers. It is very unfortunate that in ou .....

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Versus M/s. Kitex Ltd. Manufacturing activity or not - fabric cut into Dhoties - process like cutting to short length, stitching ends, ironing, folding and packing resulting in enhancement the value of product - Held that:- The Tribunal in the impugned judgment has arrived at a finding that after receiving the product from job worker, at whose end excise duty is duly paid, the assessee simply cuts them into Dhotis and, therefore, in terms of Rule 12(B) read with Circular No. 557/53/20 .....

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d, Adv. Mr. Rajiv Singh, Adv. For the Respondent : Mr. V. Lakshmikumaran, Adv. Ms. L. Charanaya, Adv. Mr. Hemant Bajaj, Adv. Mr. Anandh K., Adv. Mr. M. P. Devanath, Adv. ORDER The issue involved in the present appeal is whether the impugned goods returned from the premises of job worker after processing under Rule 12B, subjected to further manufacturing process like cutting to short length, stitching ends, ironing, folding and packing resulting in enhancement the .....

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