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Dhanesh Textile Industries Pvt Ltd Versus Commissioner of Central Excise

2017 (12) TMI 279 - CESTAT MUMBAI

Excisability/marketibility - stock of goods lying the finishing room - case of Revenue is that the goods that were lying in the finished room were not semi-finished fabrics that should have been cleared on payment of duty under the regime of normal assessment and not under section 3A of Central Excise Act, 1944 - compounded levy scheme - Held that: - mere entry in RG1 register of goods in the finished room did not render goods marketable - it is seen that no evidence of marketability of the good .....

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amount, under section 11AC of Central Excise Act, 1944 besides disallowing deemed credit amounting to ₹ 1,34,891/-. Vide order-in-original no. SB(26)26/MV/2011 dated 7th March 2011, Commissioner of Central Excise (Appeals), Mumbai Zone I rejected the appeal of M/s Dhanesh Textile Industries Pvt Ltd leading to this appeal. 2. The dispute pertains to duty liability on stock of goods lying with the appellant on 30th April 2001, i.e. 21363.75 l. metres of man-made fabric and 6606.525 l. metres .....

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was carried out in the normal manner before it was reintroduced with certain amendments and modifications on 1st May 2001 which the appellant opted for. In terms of the notification re-introducing the compounded levy scheme, the stock of finished goods was required to be declared and duty liability discharged on clearances of such finished gods without recourse to the compounded levy scheme even if cleared subsequently. The case of Revenue is that the goods that were lying in the finished room .....

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eme the stock of finished and other goods had been declared and that these had been duly inspected and verified by the authorised officer of the Central Excise Commissionerate. It is also their submission that the definition of goods in rule 7(a) as notified in notification no. 16/2001-CE(NT) dated 30th April 2001 is- (7) Nothing contained in this section shall apply to - (a) the said goods which are manufactured or produced prior to the 1st day of May, 2001 and cleared on or after that date . w .....

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dure, goods that are issued from the stock of gray fabric/raw materials are accounted for as finished goods in the absence of any other provision in the statutory records for which they should not be burdened. It is also contended that the Tribunal has consistently held that such goods that have not completed the process of manufacture are not liable to excise duty; of particular relevance is Commissioner of Central Excise v. Shree Ram Textiles & Processing Mills [2006 (205) ELT 464 (T)]. Th .....

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se form and the loose refers to fully finished goods only. The respondents have failed to produce any evidence to show that the loose quantity reflected in the RG-I Register consisted of grey fabrics which was yet to undergo several processes. The various entries in the RG-I Register could not be reconciled even in the statement submitted by the ld. advocate at the time of hearing. Even otherwise, we are in agreement with the plea taken by the Jt. CDR that in case of textiles, every process unde .....

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considered as fully finished fabric as has also been held by the Tribunal in the case of Vishnu Dyeing and Printing Works (supra). The other decision of Shree Ram Textiles and Processing Mills (supra) referred to by the respondents does not deal with the aspect that every individual process amounts to manufacture and therefore no fabric can be considered as semi-finished. Excise is a duty on manufacture and merely because the fabric was in loose condition, it does not mean that the fabric does .....

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