TaxTMI 
TaxTMI 
1986 (10) TMI 112
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....are not entitled to remove the woollen fabrics manufactured by them without payment of duty, they continued to do so and did not maintain proper records also in that connection and therefore an inspection was made on 9.5.1979 and during investigation thereafter it was found that 10,121.205 kilogram of knitted woollen fabrics had thus been removed without payment of duty and that deducting a quantity of 690.065 kilogram (wastage) 9,431.140 kilogram were found to have been removed without payment of proper duty and accordingly the same (in the shape of fabric or woollen hosiery articles into which they have been converted) had been seized as liable for confiscation. Under the notice, they were called upon to show cause why the quantity seized should not be confiscated, duty should not be demanded and penalty levied. The appellants replied denying the charges. A personal hearing was also given. Subsequently, addendum, dated 18.11.1980 was issued to the show cause notice, with reference to the calculation of the assessable value of dutiable articles. On conclusion of the adjudication the Collector of Central Excise passed orders on 27.5.1981 holding the charges established. He imposed ....
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....the order of the Board. Nor were arguments seriously advanced before us on this issue, though Shri Rangaswamy referred to the said contention. The question whether the tubular knitted woollen fabrics would be marketable as such, and would therefore be goods, is a question of fact and in the circumstances mentioned earlier as to the contention not having been raised before the Collector or pursued in the proceeding before the Board and in the absence of any evidence to support such a contention, we reject the said contention. 4. Another contention raised in the revision petition is that as the fabrics were utilised in the factory itself for further manufacture of hosiery articles in an integrated process there was no removal of manufactured fabrics as would attract excise duty. In view of the retrospective amendment of Rules 9 and 49 of Central Excise Rules this contention is not acceptable and no arguments were advanced in support of this contention in the hearing before us. 5. Notification 213 of 1972, dated 11.11.1972 read as follows: "In exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exemp....
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....anufacture of fully finished hosiery articles and 3438.160 kgs. were already under process of manufacture. The Board accordingly orders that the appellants should be offered another opportunity to prove before the Collector of Central Excise, Kanpur about their claim. The duty liability should be re-determined by the Collector after giving the benefit of exemption on the knitted woollen fabrics used in the manufacture of hosiery articles. The appellants are liable to pay duty at appropriate rates on the remaining quantity which was not used by 28.2.1979." 6. The departmental representative also agreed that the findings in the said paragraphs are not very clear. It appears, regarding all the paragraphs together, that the finding of the Board appears to be that the fabrics should not merely have been manufactured before 28.2.1979 but actually used also for the further manufacture of hosiery articles before 28.2.1979 if they are to be held entitled to exemption from duty. 7. The terms of notification No. 213 of 1972 have been extracted earlier. To support their contention that it would suffice if the fabrics had been manufactured before 28.2.1979 to claim the ben....
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....nts relied on in the show cause notice itself, that 6124.975 kg. of fabrics were in stock in the tailoring section on 1.3.1979 itself and these fabrics should therefore have been removed from the fabric manufacturing section to the tailoring section by 28.2.1979 itself. That fact of removal of 6124.975 kg. of fabrics before 28.2.1979 to the tailoring section has not been disputed in the adjudication proceedings. The appellants have claimed in the said reply that in view of such removal on or before 28.2.1979 itself this quantity of 6124,975 kg. of knitted fabrics was not liable for duty and was totally exempt. The lower authorities have not accepted this contention on the ground that before the exemption could be granted the fabric should have been actually used in the manufacture of hosiery articles before the date of the withdrawal of the exemption i.e. 1.3.1979. In the case of M/s. Andhra Sugars (cited supra), the Tribunal had held that the molasses manufactured before the withdrawal of the exemption notification would be entitled to exemption though the use thereof for further manufacture of other articles was subsequent to the date of withdrawal of the exemption. We have noted....