CEGAT rules duty payable on yarn processing, waives penalty for sick industry, allows recovery.

The Appellate Tribunal CEGAT, Mumbai decided that duty was payable on yarn doubled or dyed in a factory. Despite the applicant's argument that duty was not payable on captively consumed yarn, the tribunal waived the deposit of duty and penalty due to the applicant's status as a sick industry in the 1998-99 balance sheet. However, recovery was not stayed, allowing the department to pursue it according to the law.

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The Appellate Tribunal CEGAT, Mumbai heard a case where duty was demanded on yarn doubled or dyed in a factory. The applicant was absent, so the tribunal proceeded to decide the case based on the appeal and the departmental representative's input. The applicant argued duty was not payable on captively consumed yarn, but no exemption authority was provided. Despite no prima facie case, the tribunal waived the deposit of duty and penalty due to the applicant being declared a sick industry in the 1998-99 balance sheet. Recovery was not stayed, allowing the department to pursue it as per the law.

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