TaxTMI 
TaxTMI 
TaxTMI 
2009 (4) TMI 752
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....ing under Chapter Heading 5207.21 attracted Basic Excise Duty @ 16% ad valorem (for short, 16% BED). In addition, the bleached cotton fabrics also attracted Additional Excise Duty @ 8% ad valorem (for short 8% AED) payable under Additional Duties of Excise (Goods of Special Importance) Act, 1957. 4. The bleached cotton fabrics were not removed outside the factory but were captively consumed by the appellants in the manufacture of plastic coated fabrics within the factory. These coated fabrics, falling under heading Chapter Heading 5903.90, were cleared on payment of 16% BED and 5% AED from the factory. 5. Notification No. 67/95-C.E., dated 16-3-1995 grants exemption to inputs and capital goods manufactured in a factory and used within the factory of production in the manufacture of dutiable final product from whole of the excise duty leviable thereon which is specified in the Schedule to the Central Excise Tariff Act, 1985. 6. In view of Notification No. 67/95-C.E., dated 16-3-1995, the appellants claimed complete exemption on the bleached cotton fabrics since the same were consumed within the factory of production in the manufacture of the dutiable coated fabrics....
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..... - 2001 (130) E.L.T. 748 (T) in which it was held that the tyre cord fabrics captively consumed by MRF Ltd. was exempt from AED in terms of Notification No. 67/95-C.E., dated 16-3-1995. 10. The appellants further stated that Section 3(3) of the AED (GSI) Act, 1957 does not have provisions relating to interest and hence interest is not imposable. For this, they relied upon the Tribunal's decision in Tonira Pharma's case - Misc. Order No. M/293/08/CSTB/C-I, dated 9-5-2008 [2009 (237) E.L.T. 65 (T)], in which it was held that in the absence of specific borrowing provision relating to interest, it is not possible to demand interest. 11. The learned SDR, on the other hand, contended as under : (i) Notification No. 67/95 would not cover the AED, as has been rightly held by the lower authorities. The Tribunal in the case of Tex Prints Textiles Pvt. Ltd. reported in 2002 (147) E.L.T. 715 (T) has held that the Notification No. 1/93 issued under Section 5A of the Central Excise Act, 1944 without reference to Section 3 of Additional Duties of Excise (Goods of Special Importance) Act, 1957 does not grant exemption from additional, special or auxiliar....
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....957. Thus, as per Notification No. 67/95-C.E., dated 16-3-95, the specified excisable goods manufactured in a factory and used in the factory in or in relation to the manufacture of final products are exempt from payment of excise duty leviable thereon. As the additional duty of excise leviable under Additional Duties of Excise (Goods of Special Importance) Act, 1957 was not covered under the said Notification, non payment of additional excise duty by the appellants is incorrect. Also Notification No. 67/95-C.E., dated 16-3-1995, has no reference to the provisions of Additional Duties of excise (Goods of Special Importance) Act, 1957 and accordingly, the additional excise duty is not exempt in terms of the said Notification. 14. We extract below the observations of the Tribunal in the case of Tex Print Textiles Pvt. Ltd. [2002 (147) E.L.T. 715 (Tri.-Del.)], which are relevant to the present case. "2. The appellants are engaged in the manufacture of textile fabrics coated/laminated with preparation of low density polyethylene falling under sub-heading 5903.90 of the CETA and are not availing the facility of Modvat scheme. They had cleared fabrics at Nil rate of basic du....
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....le 8(1) but read with the relevant provisions of statute levying special duty of excise; or additional duty of excise, as the case may be". 4. In the instant case, Notification No. 1/93-C.E., dated 28-2-1993 had been issued only under Section 5A of the Central Excise Act, without having reference to the additional duty of excise leviable under Section 3 of Additional duties of Excise (Goods of Special Importance) Act, 1957. Therefore, this notification cannot be deemed to be applicable to the additional excise duty, special excise duty or auxiliary duty. The additional excise duty had been levied on fabrics in the instant case, under the Additional Duties of Excise (Goods of Special Importance) Act. The notification in question, therefore, cannot be construed so as to exempt goods liable to AED, from payment of AED, in the light of the law laid down by the Apex Court in the above referred case". 15. We are in respectful agreement with the above observations of the Tribunal. The decision of the Tribunal in the case of MRF Ltd. v. CCE, Hyderabad [2001 (130) E.L.T. 748 (T)] cited by the appellants in their support is not legal and proper as it is contrary to the law laid d....
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....time the fabrics was subjected to one process. Thus, in the case of fabrics, which were subjected to bleaching, dyeing and printing, then the duty was required to be paid by the assessee on the bleached fabrics and once again upon that fabrics, when it was dyed and a third time when that dyed fabrics was subjected to printing. 17.2 The Hon'ble Supreme Court held that if the assessee has to pay the excise duty at each and every stage of manufacturing, it would be entitled to the credit and the whole exercise would be revenue neutral. In other words, duty, if paid on bleached fabrics was available as credit for the payment of duty on dyed fabrics and duty, if paid on dyed fabrics was available as credit for payment of duty on the printed fabrics. Under such scenario, the demand of duty on the bleached and dyed fabrics is not maintainable, when duty was paid at the last stage namely printed fabrics. The above Judgement of the Hon'ble Supreme Court is squarely applicable to the appellants' case. The appellants have paid duty at the last stage i.e., at the coated stage. The appellants are entitled to the credit of duty at the intermediate stage and hence demand on intermediate st....
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....e and it cannot overlook the violation of the exemption Notification and that the CESTAT is not bound by the principle of equity because of the reason of revenue neutrality. We are of the view that the judgements of the Hon'ble Supreme Court lay down the law of the land and are binding on all concerned including the CESTAT. These cannot be overlooked or ignored unless the facts are distinguishable or there are cogent and valid reasons to differ with the same. In view of the binding nature of the Supreme Court's Judgements cited above, we dismiss the observations of the learned SDR with the contempt it deserves. 19. The Judgement of the Supreme Court in the case of Mahindra and Mahindra Ltd. [2005 (179) E.L.T. 21 (S.C.)] relied upon by the learned SDR holds that the availability of Modvat Credit to an assessee by itself is not conclusive or decisive consideration, though it may be one of the relevant consideration for deciding the applicability of proviso to Section 11A of the Central Excise Act, 1944. However, in the case before us, proviso to Section 11A(1) ibid has not been invoked in the Show Cause Notice dated 9-10-2001. Further, the Assistant Commissioner has refrained f....