Custom, Excise & Service Tax Tribunal
Passed By: Commissioner Of Central ... vs M/S Shanti Processors Ltd., M/S Arvind ... on 18 August, 2011
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT AHMEDABAD
COURT:
II
Appeal No.E/655, 470, 618 & 622/2009
Arising out of: OIO No.02/Commissioner/2009, dt.15.1.09
OIO No.3-4/Commissioner/2009, dt.20.1.09
OIO No.5-7/Commissioner/2009, dt.20.1.09
OIO No.8/Commissioner/2009, dt.23.1.09
Passed by: Commissioner of Central Excise & Customs, Ahmedabad
Appellant:
M/s Shanti Processors Ltd., M/s Arvind Products Ltd., M/s Bhoomi Textiles, M/s Vishal Fabrics Pvt.Ltd.,
Respondent:
CCE Ahmedabad
Represented by:
Shri P.M. Dave, Adv. Shri S.J. Vyas, Advocates: for Assessee.
Shri S.K. Mall, SDR for the Revenue.
CORAM:
MR.M.V. RAVINDRAN, HONBLE MEMBER (JUDICIAL)
DR. P. BABU, HONBLE MEMBER (TECHNICAL)
Date of Hearing/Decision:23.08.11
ORDER No. /WZB/AHD/2011, dt.23.08.11
Per: M.V. Ravindran:
All these appeals are listed for disposal today.
2. When the matter was called, Shri P.M. Dave, ld.Advocate and Shri S.J. Vyas, ld.Advocate, appeared for the appellants.
3. The issue involved in these cases is regarding benefit of notification No.14/2002-CE, dt.1.3.02 and more specifically regarding exemption to product falling under Sr.No.12 of the said notification. It is his submission hat as per the appellant, knitted or crocheted fabrics were eligible to benefit of Explanation II of the said notification, which reads as under:
Explanation II: For the purposes of the conditions specified below, textile yarns or fabrics shall be deemed to have been paid even without production of documents evidencing payment of duty thereon.
4. It is his submission that the lower authority are denying the benefit of Sr.No.12 to their products on the ground that the supplier of knitted or crocheted fabrics of cotton has not paid any duty. It is his submission that the Tribunal, Principal Bench, had in the case of CCE Ludhiana Vs. Prem Industries in Final Order No.328/2009-EX(PB), dt.13.5.09 as reported in 2009 (242)ELT 588 (Tri-Del), in an appeal filed by the Revenue has held categorically that any person availing the benefit of Explanation II of the notification and supplying the goods should be considered as deemed to have been duty paid and benefit of Notification No.14/2002-CE should not be denied. It is his submission that the said order of the Tribunal was dictated without any representation from the respondent. It is his submission that subsequently, in other cases like Auro Textile Vs.CCE Chandigarh 2010 (253) ELT 35 (Tri-Del), M.M. Dyeing & Finishing Mills (P) Ltd. Vs. CCE Ludhiana 2010 (258) ELT 306 (Tri-Del), Vohra Dyeing Vs. CCE Ludhiana 2010 (259) ELT 605 (Tri-Del), the very same Bench has held that the words on which duty has been paid needs to be read as actual discharge of duty. It is his submission that in all these cases, Bench has tried to distinguish decision in the case of Prem Industries. It is his submission that there seems to be a conflict in decision of Tribunals decision in the case of Prem Industries and other cases, one such decision that in the case of Simplex Mills Co.Ltd. vs. CCE Mumbai 2005 (189) ELT 228 (Tri-Mumbai), Morarjee Gokuldas Spg.& Wvg.Co.Ltd. Vs. CCE Mumbai 2005 (190) ELT 217 (Tri-Mumbai), wherein it was clearly held that the benefit of Notification No.14/2002 cannot be denied, if the goods are bought from the market, they are to be considered as deemed to have been duty paid. It is his submission that in the case of Auro Textile vs. CCE Chandigarh 2010 (253) ELT 35 (Tri-Del), both these case-laws were not considered and not cited and even if mentioned, not considered by the Bench. The judgments of Tribunal starting from Auro Textile as cited hereinabove, are per incurian, as they did not consider binding judgments of the Tribunal.
5. Ld.SDR, on the other hand, submits that Morarjee Gokuldas Spg.& Wvg.Co.Ltd. has been upturned by Hon'ble Supreme Court in the case of CCE Mumbai-I Vs. Bombay Dyeing & Mfg. Co.Ltd. 2007 (215) ELT 3 (SC). It also distinguishes the judgment of co-ordinate Bench in the case of Simplex Mills Co.Ltd and submits that there is no inherent contradiction in the judgment as submitted by ld.Counsel. He also relied upon the decision in the case of Paras Fab International Vs. CCE Jaipur 2009 (239) EL T 176 (Tri-Del).
6. We have considered the submissions made at length by both sides and perused the records. At the outset, we would like to indicate that the judgments of this Tribunal in the case of Prem Industries was an appeal against the order of Commissioner(Appeals) which allowed the benefit of Notification No.14/2002-CE to the assessee under Sr.No.14 of the notification, which has identical provision which we are required to look into. We find that while dismissing appeal filed by the Revenue, the Bench has in paragraph 6 recorded as under:
6.We have carefully considered the submissions of the ld. DR. and have perused the records. Notification No. 14/02-C.E., dated 1-3-2002 (Sl. No. 16) prescribes concessional rate of duty of 12% to processed knitted or crocheted fabrics, other than of cotton, subject to condition that the same have been made from fabrics whether processed or not, on which appropriate duty of central excise chargeable under First Schedule to the Central Excise Tariff and AED (GSI) read with any Notification for the time being in force, or additional duty of customs leviable under section 3 of the Customs Tariff Act, 1975, as the case may be, has been paid. As per Explanation II read with explanation VII to this Notification, for the purpose of conditions of this Notification, textile yarn, textile fibres or fabric shall be deemed to have been duty paid even without production of the documents evidencing the payment of duty thereon. As per the Boards Circular No. 680/71/02-CX dated 10-12-02, by virtue of Explanation II, as amended by Explanation VII, under Notification No. 14/02-C.E., - textile fibre, yarn and fabrics bought from the market are deemed to be duty paid and thus a manufacturer engaged in processing of fabrics alongwith weaving or knitting or crocheting fabric within the same factory from textile fibre or yarn bought from the market would attract excise duty of 12% ad valorem. In this case there is no dispute about the availability of the concessional rate of duty under Notification No. 14/02-CX. (Sl. No. 16) to the processed knitted fabrics made in the appellants factory from yarn stage in a continuous process. The dispute is only in respect of the quantity of the processed, knitted fabrics which were manufactured out of, grey/unprocessed fabric purchased from the market, which according to the Revenue cannot be treated as duty paid fabrics, as Sl. No. 14 of the same exemption Notification also exempts knitted unprocessed fabrics from the whole of the duty subject to certain conditions specified therein. We do not agree with this contention of the Revenue as Explanation II to the Notification clearly states that for the purpose of the conditions specified in this Notification, the textile yarn, fibre or fabrics shall be deemed to have been paid duty even without production of documents evidencing the payment of duty thereon. In this case 3604.590 Kgs. of processed fabrics valued at Rs. 4,55,330/-have been made out of grey-unprocessed knitted fabrics purchased from the market and in view of the provisions of Explanation II to this Notification, the same have to be treated as duty paid. Moreover exemption to unprocessed knitted fabrics in Sl. No. 14 of this notification is not an unconditional exemption and is subject to condition that such unprocessed knitted fabrics had been made out of duty paid yarn and no Cenvat credit has been taken and in view of this any unprocessed fabric purchased from the market cannot be treated as unconditionally exempt from duty and hence non-duty paid on the basis of Honble Supreme Court judgment in the case of CCE, Vadodara v. Dhiren Chemical Industries. In view of the above, we find no infirmity in the impugned order. Revenues appeal is dismissed.
(Emphasis supplied)
7. As against above reproduced portion of order, wherein this Bench was considering an identical situation which is before us in this appeal, the Tribunals Bench in the case of Auro Textile which was followed in other cases as held as under:
48.?It is true, that in Prem Industries case, wherein both of us were parties to the decision, related to the claim of benefit under the notification in question. But as rightly submitted on behalf of the Department that the decision was essentially on the basis of the Circular dated 10-12-2002. Besides the same was decided in the absence of any assistance on behalf of the assessee and the question which are sought to be raised in the matters in hand were never raised therein. This is apparent from a plain reading of the order passed therein. It was clearly observed therein that there was no dispute about availability of concessional rate of duty under a notification in question to the processed knitted fabric made in the appellants factory from yarn stage in a continuous process. In that set of facts, the order came to be passed in Prem Industries case which cannot apply to the eases in hand. Being so, the said decision is of no help to the assessees in the matters in hand.
8. It can be seen from the above reproduced portion of Tribunals order in the case of Auro Textile, the Bench had come to the conclusion that it was not disputed on behalf of assessee and the question which was sought to be raised in the hands in the case of Auro Textile were never raised. We are unable to agree with the findings recorded by Bench inasmuch as the issue in the case of Prem Industries and Auro Textile was same, i.e. eligibility to the benefit of Explanation II to Notification No. 14/2002 (as is reproduced in submissions made by ld.Advocate) was being considered for coming to conclusion whether the unprocessed fabrics which were received by the appellant herein, were deemed to have been duty paid as covered by the Explanation II to said Notification No.14/2002. We are of the considered view that there is definitely inherent contradiction in the findings recorded by Tribunal in the case of Prem Industries and Auro Textile. We also find that the same issue was being considered by the Bench in the case of Simplex Mills Co.Ltd. and Morarjee Gokuldas Spg.& Wvg.Co.Ltd, wherein the benefit of Notification No.14/2002 was extended to the assessee. We find that the issue regarding benefit of Notification No.14/2002 as regards condition on which duty has been paid needs to be settled by Larger Bench.
9. We find as correctly pointed out by ld.Advocate for the appellant that the Hon'ble Supreme Court in the case of Jayaswals Neco Ltd. Vs. CCE Nagpur2006 (195) ELT 142 (SC), has clearly held that the Bench of the same strength should follow the decision of the Bench of the same strength and if they are of view that said order cannot be followed, they should place the matter to the Chief for consideration to referring to Larger Bench. Respectfully following the judgment of Hon'ble Supreme Court in the case of Jayaswals Neco Ltd, we direct the Registry to place this order along with the copies of orders cited in this judgment before Honble President to consider constituting a Larger Bench and to answer reference as to whether the judgment and order delivered by Bench in the case of Prem Industries is correct or judgment delivered by the Bench in the case of Auro Textile is correct as regards the benefit of notification No.14/2002.
(Dr.P. Babu) (M.V. Ravindran)
Member (Technical) Member (Judicial)
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IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT AHMEDABAD
COURT:
II
Appeal No.
Arising out of:
Passed by: Commissioner of Central Excise & Customs (Appeals),
Appellant:
Respondent:
Represented by:
for Assessee.
for the Revenue.
CORAM:
MR.M.V. RAVINDRAN, HONBLE MEMBER (JUDICIAL)
DR. P. BABU, HONBLE MEMBER (TECHNICAL)
Date of Hearing/Decision:
ORDER No. /WZB/AHD/2011, dt.
Per: M.V. Ravindran:
.
(Dictated & Pronounced in Court) (Dr.P. Babu) (M.V. Ravindran) Member (Technical) Member (Judicial) cbb 2