2005 (5) TMI 430

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....5205.19 of CET Act, 1985 at their factories at Kirikera and Kotnur. These units are Registered as Unit 'A' and Unit 'B'. The appellants contend that almost 75% of the single yarn manufactured by the appellants at both the units is cleared by them on payment of duty for sale. The remaining 25% of the single yarn is cleared to their own units, known as Unit 'D' and Standard General Finance Ltd. for the purpose of undertaking the processes of doubling, gassing, reeling, mercerising etc. The yarn after being subjected to the above processes, is received back in its entirety by the sending unit (subject to the invisible losses) packed in cartons and thereafter cleared for export under bond or on payment of duty in the domestic market. They were ....

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.... further contention is that 85% of the yarn sent to the job workers for further processing has been exported and the terms of Rule 19(2) of CE Rules would be applicable and no duty demand can be made. In this regard, they rely on the judgment rendered in the case of Kansal Knitwears v. CCE, Chandigarh - 2001 (136) E.L.T. 467 (Tri.-Del.) and the Constitutional Bench judgment of the Apex Court rendered in the case of Thermax Private Ltd. v. CC - 1992 (61) E.L.T. 352 (S.C.).and that of the Mangalore Chemicals & Fertilizers Ltd. v. DC - 1991 (55) E.L.T. 437 (S.C.). Their further contention is that provisions of Rule 96E continues in Central Excise Rules, 2001. The last ground taken is that the entire demand is revenue neutral and rely on the ju....