TaxTMI 
TaxTMI 
2013 (8) TMI 645
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....or steam and cleared for home consumption from one or more factories of a manufacturers or from any factory by or on behalf of one or more manufacturers, exceeds 50 lakh square meters in a financial year. This Exemption Notification was superseded by Notification No. 111/87 CE dtd. 01.04.87 which also provided for the similar exemption. The new Notification exempted cotton fabrics processed without the aid of power or steam (other then screen printing) cleared for home consumption up to a quantity of 50 lakh Sq. mtrs. in any financial year. The quantum of exemption in respect of the cotton fabrics subject to screen printing was 75 lakh Sq. mtrs.. The proviso to the new exemption read as under:- "Provided that the aggregate quantity of clearances of the said goods by a manufacturer from one or more factories in terms of clauses (a) and (b) of this paragraph taken together, shall not exceed 75 lakh Sq. mtrs. Provided further aggregate quantity of clearances of the said goods from any factory by one or more manufacturers shall not exceed 75 lakh Sq, mtrs. in terms of clause (a) and 50 lakh Sq. mtrs. in terms of clause (b) of this paragraph, respectively....
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....mmissioner, this appeal has been filed. 2. Heard both the sides. 3. Sh. J.M.Sharma, Consultant, Ld. Counsel, for the Appellant, pleaded that the appellant were engaged in the processing of cotton powerloom fabrics without a aid of power or steam during period from 01.04.87 to 21.10.87 and thereafter they had stopped the processing activity and were doing only the stentering which was fully exempt from duty, that the cotton fabrics processed during period from April'97 to Oct.'87 was only 43,31,361.10 L.Mtrs equivalent to 49,53,330.20 Sq. mtrs., that during this period they had returned 6,43,686.75 L.mtrs of grey fabrics to their customers without processing, that the allegation of the department that out of this, a quantity of 3,63,213.55 L.mtrs of fabric had been processed, is without any basis, that this allegation is based on the records of eight contractors but out of those eight contractors enquiry was made only with two contractors and no enquiry was made with others, that even the statements of two contractors do not support the department's allegation, that no enquiry was made with the customers, who had sent the grey fabrics for processing, though information about t....
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....ies in the registers maintained by them pertain to the processing of cotton fabrics carried out in the appellant's factory, that the statement of two contractors are corroborated by the statement of Sh. Jayantilal L. Mehta, Administrative Manager of the appellant firm, that statements of the above mentioned contractors and Sh. Jayantilal L. Mehta confirm that the quantity of fabrics processed by the Appellant till 21.10.87 was 54,11,404 Sq. mtrs.,that exemption Notification No. 111/87 CE was not available to the appellant as their clearances of processed cotton fabrics during the financial year 1987-88 had exceed 50 lakh Sq. mtrs., that from the language of this exemption Notification, it is very clear that benefit of this exemption is not available, when the clearances of cotton fabrics made for home consumption in a financial year exceeds 50 lakh Sq. mtrs. and in that case, the duty become chargeable from the very first clearances, that Appellant had under reported the quantity of the processed fabrics with intent to evade the duty and that in view of this, the duty demand has been correctly confirmed and penalty has been correctly imposed on the appellant firm as well as on its ....
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....ter 52 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), (hereinafter referred to as the "said goods"), and cleared for home consumption, on or after the 1st day of April, in any financial year, by a manufacturer from one or more factories- (a) in a case where the said goods have been subjected to the process of screen printing, upto an aggregate quantity not exceeding 75 lakh Sq. mtrs; (b) in any other case, upto an aggregate quantity not exceeding 50 lakh Sq. mtrs. From the whole of the duty of excise leviable thereon under the said Schedule and the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957): Provided that the aggregate quantity of clearances of the said goods by a manufacturer from one or more factories in terms of Clauses (a) and (b) of this paragraph taken together shall not exceed 75 lakh Sq. mtrs: Provided further that the aggregate quantity of clearances of the said goods from any factory by one or more manufacturers shall not exceed 75 lakh Sq. mtrs in terms of Clause (a) and 50 lakh Sq. mtrs....
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....the same prescribes quantitative limits in a financial year of the clearances of cotton fabrics processed without aid of power or steam which were eligible for fully duty exemption. There is no provision in this notification to the effect that the exemption would not be applicable if the aggregate quantity of clearances of processed fabrics for home consumption for one or more factories of the manufacturer during the financial year exceed the prescribed threshold limit. In view of this we hold that the interpretation to this notification given by the Commissioner is incorrect and as such even if the clearances of the processed cotton fabric during a financial year exceed the threshold limit prescribed in the notification, it is only the clearances in excess of this limit which would attract duty, and crossing the threshold limit would not result in total denial of the exemption. 10. As regards the other allegation regarding processing of 3,63,213.55 L.Mtrs of cotton fabrics without accounted on the records, we find that this allegation is based on the records of contractors. Though inquiry was not made with all the contractors with regard to their records recovered from the fact....