2018 (6) TMI 772 - AT - Central Excise

Tribunal affirms excise duty on single ply jute yarn despite no sales

SAI JUTE PRODUCTGS PVT. LTD Versus CCCE & ST, GUNTUR

The Tribunal upheld the Order-in-Appeal passed by the Commissioner (Appeals) regarding the dutiability of single ply jute yarn produced by the appellant, ... Excisability/marketability - single ply jute produced by the appellant and captively consumed in the manufacture of multiple fold hank jute yarn - whether the single ply yarn produced by the appellant is marketable and thereby liable to excise duty or not? - Held that:- Appellant had an intention of marketing this yarn even if they have not actually sold any. Thus, the excisability of the product in question is established by the declaration by the assessee themselves in the classification list - singly ply jute yarn manufactured by the appellant is marketable and therefore excisable - appeal dismissed - decided against appellant. Issues:Dutiability of single ply jute produced and captively consumed in the manufacture of multiple fold hank jute yarn without payment of duty.Analysis:The appeals were filed against Orders-in-Appeal rejecting appeals against the orders of the Asst. Commissioner regarding the dutiability of single ply jute produced by the appellant and used in the manufacture of multiple fold hank jute yarn. The final products of the appellant were exempted, leading the department to demand duty on the dutiable intermediate product, single ply jute yarn. The demands were confirmed by the adjudicating authority and upheld by the Commissioner (Appeals).The grounds of appeal included arguments that jute yarn at the bobbin stage is not marketable and, therefore, not excisable. Reference was made to a similar case where demands were dropped based on the marketability of jute yarn at the bobbin stage. The appellant also mentioned that the entire demand arose from an audit objection by CAG, which had been settled. The appellant sought to set aside the Order-in-Appeal with consequential relief.The arguments presented by the Department reiterated the need to examine the marketability of goods on a case-by-case basis. It was highlighted that the appellant had filed classification lists for single jute yarn as goods intended for clearance, indicating the capability of marketing these goods and, therefore, their liability to excise duty.After considering the arguments and perusing the records, the Tribunal focused on determining whether the single ply yarn produced by the appellant was marketable and thus liable to excise duty. The Tribunal noted that the appellant had filed a classification list for single ply jute yarn, indicating an intention to market the product, even if no actual sales had taken place. Based on this, the excisability of the product was established, as declared by the appellant themselves. Consequently, the Tribunal upheld the Order-in-Appeal passed by the Commissioner (Appeals) as it found the single ply jute yarn manufactured by the appellant to be marketable and excisable, rejecting the appeals.