2008 (7) TMI 654

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....003 21-4-03 April 1999 to Sep 1999 Rs. 1,54,201/- No. 173/2003 May 2000 to Nov. 2000 Rs. 3,35,569/- Common facts of the cases are that FIL had removed cotton yarn manufactured by it to job worker under Rule 96E of erstwhile Central Excise Rules, 1944 (CER), for further manufacture without payment of duty. Yarn was converted into knitted fabrics and exported. Rule 96E provided for removal of cotton yarn for further process such as weaving to another factory. For the purpose of the Rule 'factory' means a factory working with the aid of power in which - (i) the said yarn is spun and cotton fabrics are woven; or (ii) only cotton fabrics are woven and the duty thereon is paid on square metre, ad valorem or weight basis, as the case may ....

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.... have not been followed that the goods entered the domestic market. Since the same has not been done, the demand cannot be upheld, we would find that the appeal in this case should be allowed;" Reliance is also placed on the decision of Bangalore Bench of this Tribunal in GTN Textiles Ltd. v. CCE, Hyderabad-III reported in 2005 (189) E.L.T. 296 (Tri.-Bang.), wherein it has been held that removal of cotton yarn from one factory of assessee to another for processing or packing or for manufacture of cotton fabrics did not require payment of duty in terms of Rule 96E of erstwhile Central Excise Rules, 1944. The ld. Counsel cites the following observations in the said decision. "After due consideration, we are of the considered opinion that al....