1998 (7) TMI 175

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....pondent. [Order per : P.C. Jain, Member (T)]. -  Briefly stated the facts of this case are as follows : The respondents herein are manufacturers of cotton yarn as also of cotton fabrics. They had been availing of the procedure of Rule 49A for discharging the liability of duty on cotton yarn along with the liability on cotton fabrics when the latter is removed from the factory. In ter....

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....s appeal of the Revenue before the Tribunal. 2. Ld. SDR Sh. A.K. Agarwal, submits that Rule 49A merely postpones the duty leviable on cotton yarn to the stage when the duty is paid on the fabric; it does not change the stage of levy of duty on cotton yarn. He, therefore, submits that the lower appellate authority's findings that in the face of Rule 49A being availed of by the respondents, ....

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....fabrication will be chargeable to rate prevailing on the day of removal of fabrics. By a latest judgment of the Supreme Court of India in the case of M/s. Wallace Flour Mills Co. Ltd. v. C.C. Ex., this issue has been set at rest [1989 (44) E.L.T. 598 (S.C.)]. The Supreme Court held that "It is well settled by the scheme of the Act as clarified by several decisions that even though the taxable even....

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....rics when the cotton fabrics are removed. This also becomes clear further from the fact that interest is charged at prescribed rates under the said Rule for the accommodation obtained by the assessees or cotton fabric manufacturers under Rule 49A and it is the appropriate duty leviable on cotton yarn on the date of removal of the cotton yarn for weaving which is collected from the cotton fabric ma....