1999 (7) TMI 297 - AT - Central Excise

Tribunal rules power use integral to manufacturing process in duty payment appeal

The tribunal partly allowed the appeal by confirming the duty payment while setting aside the confiscation of goods and imposition of penalty. This ... Man-made fabric - Processed man-made fabric - Manufacturer Issues:1. Central Excise Duty demand confirmation2. Confiscation of cotton fabrics3. Imposition of penaltyCentral Excise Duty Demand Confirmation:The case involved a confirmation of demand for Central Excise Duty, confiscation of cotton fabrics, and imposition of penalty on the appellant. The officers observed the use of electric blowers and diesel burners in the dyeing process at the factory premises. The appellant used blowers to maintain the temperature of the dyeing solution, which was considered integral to the manufacturing process. The appellant argued that the blowers were only used during winters and not throughout the year, thus not integrally connected to the manufacturing process. However, it was established that mixing colors using blowers was essential for fabric processing, especially for printing, making it an integral part of the process.Confiscation of Cotton Fabrics:The appellant contested the confiscation of the processed fabrics and imposition of penalty, citing legal precedents and interpretations. The appellant relied on a decision by the Delhi High Court, which stated that there was no provision for confiscation of goods and imposition of penalty under the relevant Act. The appellant argued that their case aligned with previous tribunal decisions, emphasizing that the use of power in the manufacturing process was crucial for determining liability.Imposition of Penalty:The tribunal analyzed various legal precedents and interpretations regarding the use of power in manufacturing processes. It was established that in this case, the use of blowers with power for mixing colors was deemed as using power in the manufacture of the final product. The tribunal differentiated this case from previous judgments where power was not directly involved in the manufacturing process. Consequently, the tribunal held that the duty amount was payable due to the use of power in the manufacturing process. However, the tribunal set aside the confiscation of goods and imposition of penalty based on the interpretation of the law by the Delhi High Court.In conclusion, the tribunal partly allowed the appeal by confirming the duty payment while setting aside the confiscation of goods and imposition of penalty. The decision was based on the integral use of power in the manufacturing process of processed cotton fabrics and the interpretation of relevant legal provisions and precedents.