9911796707
TMI Blog2008 (6) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... e Central Excise Duty on FWC and there is no dispute in this regard 4. FWC is manufactured from Polyester yarn. Polyester Yarn is woven on the looms to produce Woven Greig fabric. The greig fabric is heat treated on a machine with plain rollers. Such heat treated fabric is cut to size and then joined together by splicing/seaming, after which it is subjected to final heating/calendering and finishing process like trimming and then the finished FWC is packed and cleared on payment of duty under Chapter 59. 5. The woven greig fabric produced during the manufacture of FWC is classifiable under Heading 54.08 and is exempt from duty and in respect of the same, no dispute has arisen. However, in respect of the heat treated fabric, before it is processed into FWC, the impugned demands have been raised holding that the same is classifiable under Heading 54.09 and that though basic excise duty on the same is exempt, additional duty under the Additional Duties of Excise (Goods of Special Importance) Act, 1957 is leviable on the same. 6. Shri S.K. Bagaria, ld. Sr. Advocate appearing for the appellants challenges the demand on various grounds We summarise the main arguments below: (a) The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As such, even if the impugned goods are held to be chargeable to additional duty, the same is required to be exempted under the aforesaid notifications as the impugned goods were consumed within the factory of production. 7. The ld. Advocate fairly states that the demands have been raised within the normal period of time and therefore the question of limitation has not arisen in this case. However, he points out that the duty demands were raised following an audit objection and since the audit objection has been settled, the demands are required to be dropped. 8. Shri Vineet Ohri, ld. Jt. CDR appearing for the Department strongly supports the impugned order. His main arguments are summarized below:- (a) The impugned goods have already been classified for the preceding period in the appellant's own case by the Tribunal vide SWIL Ltd. v. CCE, Kolkata - 2003 (154) E.L.T. 288 holding it to be liable to additional excise duty and even though the appellants have filed an appeal against the same in the Hon'ble Supreme Court according to the ld. Advocate, the ratio of the same holds in the absence of any stay order from the Hon'ble Supreme Court. (b) Even though the 1957-Act has not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al duty of excise under the 1957-Act during the relevant period and whether the demands confirmed are sustainable. There is no doubt that the end-product (FWC) is chargeable to duty under Chapter 59 and that the same has discharged the duty liability before being cleared to paper factories and for export. There is also no dispute that the end-product (FWC) is not chargeable to additional duty of Excise under the 1957-Act as stated by the ld. Sr. Advocate. 10. The impugned goods which arise at a stage prior to production of the end-product FWC is internally consumed. The argument by the appellants that there is no sale and the 1957-Act does not authorize collection of additional excise duty for goods not sold, is not acceptable. The Objects and Reasons of the 1957-Act no doubt make it clear that on the three groups of commodities i.e. Sugar, Tobacco products and Textile products, the 1957-Act levies additional duty of excise in lieu of sales tax imposed by the States earlier and such additional duties of excise are distributable to the States. But the constitutional provisions for levy of sales tax and excise duty have not been altered and what is authorized to be levied under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause Notices, the cause of the Public Revenue should irreparably suffer with no hope of recovery of such huge amounts of Revenue from the salaries of the defaulting officials. Fortunately, as far as the present Show Cause Notices are concerned, the provisions of the basic law i.e. the Central Excise Act, 1944 as well as the Central Excise Rules, 1944 which are applicable by reference to levy and collection of the Additional Excise Duty under the 1957-Act have been invoked. Moreover, both the enactments the 1944-Act and the 1957-Act operate in the same field viz, excise duty on manufactured goods as pointed out by the ld. Jt. CDR and hence the decision of the case of Suresh Synthetics where the demand was made under an entirely different Act viz, the Customs Act, 1962 applicable to imports and exports is distinguishable from these cases. 13. Thirdly, the demands made under the present Show Cause Notices were at the rates prescribed under the 1957-Act and hence there could have been no doubt in the minds of the appellants that the demands were being made under the 1957-Act and not under any other enactment. For these reasons, we hold that the impugned demand notices, despite all the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cesses into the ambit of the term "manufacture" as has been upheld in the decisions of the Constitution Bench of the Hon'ble Supreme Court in the cases of Empire Industries (cited supra) and Ujagar Prints (cited supra), the impugned goods having, undergone the process of heat setting are to be held to be manufactured goods. However, it is not enough that the impugned goods should meet the test of manufacture alone. It has also to meet the test of marketability. Ld. Jt. CDR has again argued that in the appellant's own case, for the preceding period, the Tribunal had held the very same goods to be marketable. He has in fact cited at length the observation of the Tribunal from paragraph 8 of the cited decision which is as follows :- "Now, we come to the question of marketability of the impugned product. It has been held by the Supreme Court in U.O.I., v. Delhi Cloth & General Mills - 1977 (1) E.L.T. (J199) (S.C.) that "To become" "goods" an article must be something which can ordinarily come to the market to be "bought and sold." The goods should be capable of being bought and sold. The fact that the goods is not actually sold and is entirely consumed captively is not material. It ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout giving any reasons. Secondly, we also find that the Bench has passed its order relying on its own opinion that "Fabrics made of polyester yarn is not such a product which cannot be brought to market for being bought and sold". In this regard, we observe that the ld. Sr. Advocate has cited a number of decisions of the Hon'ble Supreme Court which cast the burden to prove marketability on the Department. In F.G.P. Ltd. (cited supra), it was held by the Hon'ble Supreme Court that the goods are marketable is to be proved by Revenue and that in the absence of proof brought on record by the Revenue that cloth looms are marketable or capable of being marketed, it is not possible to hold that the test of marketability is satisfied. In Metro Tyres (cited supra), the Hon'ble Supreme Court again held that the burden to prove marketability of goods is on they Department. In Gujarat Narmada Valley Fertiliser Co. Ltd. (cited supra), the Hon'ble Supreme Court held that simply because certain articles fall within the Excise Schedule, does not make them marketable. Actual sale in the market is not necessary where articles are capable of being sold in the market or known in the market as goods ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
