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Tribunal exempts non-marketable woven fabric from Central Excise duty, citing lack of marketability. The Tribunal ruled in favor of the appellant, holding that the impregnated special woven fabric, being an intermediate product with a very short shelf ...
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Tribunal exempts non-marketable woven fabric from Central Excise duty, citing lack of marketability.
The Tribunal ruled in favor of the appellant, holding that the impregnated special woven fabric, being an intermediate product with a very short shelf life and lacking marketability, was not subject to Central Excise duty. Relying on precedents, the Tribunal determined that non-marketable goods cannot be considered excisable, thus allowing the appeals and granting any consequential relief.
Issues: Chargeability of Central Excise duty on intermediary product - Impregnated special woven fabric during tubular bags manufacture.
Analysis: The case involved an appeal against the Order-in-Appeal No.70/2003 passed by the Commissioner of Central Excise (Appeals), Bangalore, regarding the chargeability of Central Excise duty on impregnated special woven fabric arising during the manufacture of tubular bags. The impugned order classified the item under Chapter Subheading No.5903.29/5903.90 of Central Excise Tariff.
The appellant argued that the goods were not excisable as they lacked marketability and had a very short shelf life of 4-5 minutes. Citing case laws such as Chloride Industries Ltd. vs. CCE, Calcutta and K.E. Technical Textiles Pvt. Ltd. vs. CCE, Kolkata, the appellant contended that non-marketable goods cannot be considered excisable.
The Revenue, represented by the learned AR, supported the findings of the lower Revenue authorities. After considering the submissions from both sides, the Tribunal concluded that the impregnated special woven fabric, an intermediate product in the tubular bags manufacturing process, had a very short shelf life and could not be marketed. Therefore, it did not qualify as excisable goods, and Central Excise duty could not be imposed on it.
Relying on previous decisions of CESTAT, Kolkata in Chloride Industries Ltd. and K.E. Technical Textiles Pvt. Ltd., the Tribunal held that since the goods were not marketable, they were not excisable. As a result, all four appeals were allowed, and any consequential relief was granted. The judgment was pronounced in open court on 04/10/2016.
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