2017 (12) TMI 279

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....de order-in-original no.SB(26)26/MV/2011 dated 7th March 2011, Commissioner of Central Excise (Appeals), Mumbai Zone I rejected the appeal of M/s Dhanesh Textile Industries Pvt Ltd leading to this appeal. 2. The dispute pertains to duty liability on stock of goods lying with the appellant on 30th April 2001, i.e. 21363.75 l. metres of man-made fabric and 6606.525 l. metres of cotton fabric in the store room and 4162.70 l. metres of man-made fabrics and 65846.90 l. metres of cotton fabrics in the finishing room. Appellant discharged duty on the former but did not do so on that lying in the finishing room. The significance of stock on that particular date for demand of duty in show cause notice is the resumption of 'compounded levy sch....

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....ed in this section shall apply to - (a) the said goods which are manufactured or produced prior to the 1st day of May, 2001 and cleared on or after that date". whereas the goods lying in the finishing room had not undergone the process of stentering. Furthermore, by relying on the decision of the Hon'ble Supreme Court in Union of India v. Delhi Cloth and General Mills Ltd. [1977 (1) ELT (J 199) (SC)] and South Bihar Sugar Mills v. Union of India [1978 (2) ELT J336 (SC)], it is contended the goods have to be marketable to be liable to excise duty which the impugned material would not be until after stentering,. They also contended that as per their procedure, goods that are issued from the stock of gray fabric/raw materials are a....

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...., no fabric can be considered as a semi-finished fabric. It is not the respondent's case that the entire quantity shown as loose was all grey fabric only. Once the grey fabric has undergone some processing which amounts to manufacture as per the chapter note, the same is to be considered as manufacture and duty leviable up to that stage of fabrics as to be discharged at the rate prevalent on 15-12-98. The loose fabrics has to be considered as fully finished fabric as has also been held by the Tribunal in the case of Vishnu Dyeing and Printing Works (supra). The other decision of Shree Ram Textiles and Processing Mills (supra) referred to by the respondents does not deal with the aspect that every individual process amounts to manufactur....