1987 (9) TMI 290

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....t. 2. Briefly stated, the facts are that the appellants are a composite mill manufacturing cotton fabrics falling under Item No. 19(1) of the Central Excise Tariff Schedule. During the period from 1-12-1972 to 30-10-1977, they utilised cotton fabrics of grey coarse and medium varieties out of their own production as back grey cloth for industrial purposes in the process of printing. It appears that the appellants failed to pay hand-loom cess on such clearances of back grey cloth. The appellants had also filed a separate claim for refund of handloom cess paid during the period from 5-3-1978 to 27-9-1980 on the ground that cess was not payable when the fabrics were removed for internal consumption. The Assistant Collector, on completion of a....

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....g, bleaching or sizing process, are exempted from the whole of the excise duty leviable thereon under the Central Excises and Salt Act, 1944. This exemption is unconditional. In accordance with the provisions Government under clause (e) of Section 5(2) of the Khadi and other Handloom Industries Development (Additional Excise Duty on Cloth) Act, 1953 (Act No. 12 of 1953), the Central Government exempted from the additional excise duty leviable under the said Act (we shall refer to this duty as handloom cess) all varieties of cloth which were for the time being exempted from the excise duty leviable thereon under the Central Excises and Salt Act 1944. A proviso was inserted in this Notification on 7-7-1970 whereby the notification was made in....