TaxTMI 
TaxTMI 
1998 (6) TMI 183
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....ured by him captively for production of fabrics was given an option to follow the special procedure under the Rules 96V & W and instead of paying excise duty on captively consumed yarn, it can pay duty at the rate payable on the cotton fabric itself. The appellants had opted to pay duty as per the special procedure. They had filed price lists for the cotton fabric falling under Item 19-I of the old Central Excise Tariff which were also approved by the proper officer. 2. Proceedings were initiated against the appellants Ashoka Mills by issue of show cause notice in which it was alleged that the appellants were availing special procedure in respect of cotton yarn used for production of cotton fabrics falling under Item 19 CET under Rule....
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....er dated 27-3-1981. The Assistant Collector's order was similarly upheld by the Collector (Appeals), Bombay by the impugned order but the demand, it was held, was enforceable only for the one year period under Rule 10 read with Rule 173J. 5. The appellants challenged the above orders before the Gujarat High Court raising the issue that duty on yarn cannot be included in the assessable value of fabrics and also that proceedings initiated under show cause notice invoking Rule 10A would not survive after it was substituted on 6-8-1977. The High Court decided the issues by its order dated 4-3-1993 against the appellants and granted the appellants prayer to withdraw the petitions and directed the Tribunal to decide appeal with regard to th....
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.... conferred upon the appellants as a special procedure merely postponed the stage of collection of duty but that could not be confused with the liability to pay duty which arose at the stage when yarn was manufactured. In such a context it has been held by High Courts that the assessable value of cotton fabrics must include the value of yarn plus the excise duty required to be paid thereon. See in this context Gujarat High Court judgment in the case of Mahendra Mills v. UOI - 1988 (36) E.L.T. 563 and that of Bombay High Court in Kamala Mills v. UOI - 1988 (34) E.L.T. 539. It is seen that as against the Maheswari Mills decision (supra) of the Tribunal rendered in 1990 relied upon by the appellants, there is a subsequent decision of the Tribun....