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TMI Blog2022 (8) TMI 986X X X X Extracts X X X X X X X X Extracts X X X X ..... with Rule 49 of erstwhile Central Excise Rules, 1944, at the time of removal of the said fabrics. At that time of clearance of cotton yarn to weaving section one may not know whether it was intended for the manufacture of exempted grey cotton fabrics or dutiable processes cotton fabrics. A show cause notice was issued to the petitioner for recovery of excise duty leviable on cotton yarn manufactured and removed captively for the manufacture of entire grey cotton fabrics during the period mentioned against each besides the proposal for imposition of penalty on them under the provisions of erstwhile Rule 173Q of CER, 1944. SI. No. Show Cause Notice No & Date Period Duty demanded (Rs.) 1. 01/2001 dated 29.01.2001 Jan & Feb 2000 58,39,658 2. 02/2001 dated 10.03.2001 Mar & Apr 2000 77,60,916 3. 11/2001 dated 11.05.2001 May & Jun 2000 81,60,269 4. IV/16/28/2001 dated 27.07.2001 Jul & Aug 2000 70,30,663 5. IV/16/28/2001 dated 27.07.2001 Sep & Oct 2000 59,53,573 6. IV/16/28/2001 dated 10.01.2001 Nov & Dec 2000 59,26,119 4,06,71,198 3. Since cotton grey fabrics were exempted from payment of duty, the benefit of duty exemption under Noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the show cause notice No.1 of 2001 dated 29.01.2001, the show cause is that as per Rule 9(1) and Rule 49(A) of Central Excise, as much as the excisable goods of cotton yarn were cleared on without payment of duty at the time of removal to the weaving section and further for such removal by deferred payment of duty subject to payment of interest. He further again referred to the letter of the Deputy Commissioner of the year 2001, wherein, the Deputy Commissioner, had given a report admitting that the petitioner being a composite Mill and the yarn manufactured are consumed captively in the manufacture of both grey and processed fabrics. The yarn issued for the manufacture of grey or processed fabrics cannot be quantified at the time of issue for weaving. The processed fabric are cleared on payment of appropriate fabrics duty. Most of the woven grey fabrics are cleared for export and the remaining are cleared for home consumption on payment of yarn duty. Hence, the yarn content in the grey fabrics are determined in the reverse process on the basis of clearance made. Further, the petitioner referring to the impugned order in the original. In a page No.11 referring to para 22 of the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 49 A, a manufacturer who has applied for and obtained permission from the proper officer to pay duty on cotton yarn along with the duty on cotton fabrics is required to pay interest on yarn duty paid on the quantity of the yarn captively consumed in the manufacture of cotton fabrics. In view of the same, demand of interest under Rule 49 A is not maintainable. With regard to the petitioner, this order has been passed on the appeal filed by the petitioner. This order is also not challenged. Further, for the point of petitioner not approaching the appellate authority namely CESTAT and approached this case, the petitioner relied upon this Court reported in 2018 (17) G.S.T.L. 429 (Mad.) in the case of Tansi Fabrication Works Vs Joint Commissioner of CGST and Central Excise, Tirunelvel, this Court finding that once the authority passed a non speaking order, can approach this Court, since it is in violation of principles of natural justice. 7. The learned Junior Standing Counsel appearing for the respondents submitted that the impugned order is a detailed one wherein, the Commissioner had dealt in detail all the submissions made by the petitioner and also the observations made by the CE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CESTAT order does not end there. The assessee has quoted the Deputy Commissioner's observation that there is no short payment of duty and there is no ground for invoking section 11A. First the Tribunal has not observed this as claimed by the assessee. It is part of the assessee's counter argument. Moreover, the assessee has conveniently omitted the subsequent sentence which states that "since interest on the deferred payment of duty is demanded, the demand is raised under rule 49A. The SCN may be issued as it is not hit by time bar". i.e., the Deputy Commissioner has only recommended the issue of SCN for the demand of the interest not paid as per rule 49A. So this part of the covering letter is misinterpreted by the assessee. 5. It is submitted that the provisional assessment was made not only to cotton yarn but also to non-cellulosic spun yarn and it primarily determines the percentage of waste to be included for working out the yarn consumed captively, and its valuation aspect only. The discussion made about rule 49A is of no consequence in respect of that order and as the main and separate issue regarding Rule 49A was pending to be decided in the SCNs by a higher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is available on record and also the fact that the appellant had mentioned before the Commissioner the details of payment can be verified from the record yet the Commissioner has proceeded to confirm the demands. In view of this contradiction which we find, prima facie, there is no application of mind and the order is not a correct and a speaking order. Therefore, while granting waiver of pre deposit of the amount we take up the appeal and remand the case to the Commissioner of Central Excise, Madurai for denova consideration. The Commissioner shall take up the plea of provisional assessment which has been made in the present case. As the assessments are provisional the same are required to be finalized and for difference of duty if any, the department shall issue show cause notice calling upon the appellant to pay the difference of duty. All other aspects raised in the show cause notice be looked into after finalizing the provisional assessment. We therefore, directed the Commissioner of Central Excise to finalize the assessment in the present case and proceed thereafter. Thus, the appeal is remanded on the above terms. 10. Thereafter, the petitioner again participated in adjudica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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