Customs, Excise and Gold Tribunal - Mumbai
Morarji Gokuldas Spg. And Wvg. Mills ... vs Commissioner, Central Excise And ... on 21 July, 2004
ORDER T. Anjaneyulu, Member (J)
1. This is an application under Section 35F of the Central Excise Act, 1944 filed by the appellant to dispense with the pre-deposit order of the confirmed duty of Rs. 4,05,621/- under Section 11A and equivalent amount of penalty under Section 11AB of the Central Excise Act, 1944 and to grant stay of the operation of the impugned Order-in-Appeal No. PD/186/M-4/2003 dated 16.09.2003 passed by the Commissioner of Central Excise (Appeals), Mumbai-IV and to waive further recovery of the same, pending disposal of the appeal.
2. The assessee was engaged in the manufacture of doubled yarns, out of single yarns on which duty was paid at spindle stage. The process of doubling of yarn amounted to `manufacture' resulting in a new and distinct product coming into existence. It is exempted from payment of duty in terms of Notification No. 35/95-CE dated 16.03.1995. A proviso is added to this vide new Notification No. 84/95-CE dated 18.05.1995, according to which the exemption to the processing of doubling vide Notification No. 35/95-CE was made unavailable to a manufacturer having plant and machinery for manufacturing single yarn. As the assessee was manufacturing single yarn, they were not eligible for exemption under Notification No. 35/95-CE as amended in respect of doubled yarn. The assessee had manufactured and cleared different types of doubled yarns during the period from August 1995 to 03.09.1996, involving a differential value, totaling to Rs. 18,79,687/-, which has resulted in the non-payment of Central Excide duty to Rs. 4,05,621/-. The assessee had contravened the provisions of Rules 173B, 173C, 173F and Rule 9(1) read with Rule 173G of CER 1944 in as much as they had failed to file declarations as required under the said Rules. Therefore, the assessee was issued four Show Cause Notices demanding duty.
3. The contention of the assessee is that the amended notification excluded "double yarn" from the scope of Notification No. 35/95-CE only if such yarn was cleared from a factory in the event of such a factory having the facility for the production of single yarn in respect of yarn captivity used in the manufacture of fabrics within the same factory, the exemption contained in the Notification No. 84/95 was available since this yarn could not said to have been cleared from the factory and that clearance from the factory means actual removal from the factory.
4. After due enquiry, the Dy. Commissioner, Central Excise, Division-11, M-IV confirmed the demand. On filing the appeal by the assessee, the Commissioner of Central Excise (Appeals), also confirmed the duty demand, but, however, reduced the penalty amount to the tune of Rs. 75,000/-.
5. We have gone through the records. The issue appears to have been settled vide Order No. CB/673-675/WZB/Cri dated 24.05.2004. Out of the Rs. 4,00,000/- of duty demand, about 85% would be the credit on single yarn. Therefore, at this prima facie stage, we feel it appropriate to direct the assessee to pre-deposit of Rs. 1,00,000/- and compliance to be reported by 21.09.2004. On such clearance, further deposit is waived and recovery is stayed. The application is disposed of accordingly.
(Pronounced in Court on 21.07.2004)