2008 (2) TMI 235

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....able to ad valorem duty up to 15-12-1998. However compounded levy scheme was introduced with effect from 16-12-1998 where duty was required to be paid on the basis of annual capacity of production determined by the Commissioner under the Hot Air Stenter Independent Processors Annual Capacity Determination Rules, 1998 at the rates prescribed vide Notification No. 36/98/C.E. (N.T.). Since the compounded levy scheme was introduced with effect from 16-12-98 all the fabrics processed up to mid-night of 15-12-98 were required to discharge duty at the ad valorem rates prevailing then and duty under the compounded levy scheme was applicable only in respect of the fabrics processed on or after 16-12-98. The respondents were required to declare stock....

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....emi-finished fabric. Though the respondents contend that the fabric lying in loose condition was yet to undergo stentering, they failed to furnish any evidence to show that the fabrics in question were yet to be stentered. Even if it is presumed that the stentering was yet to be carried out, once the fabrics has undergone other processes like scouring, bleaching, mercerizing, dyeing, painting etc., they were required to pay duty on each of these processes on ad valorem basis on such stock lying on 15-12-98. Attention was also drawn to the Notification No. 23/92-C.E. (N.T.) dated 1-10-92 which prescribes the proforma for RG-I Register and column-3 thereof relates to quantity manufactured in packed and loose form and specifically states that ....

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....sisted of the entire grey fabric issued for processing. He also submitted a statement showing as to how the quantity of packed cotton fabrics was arrived at and what was the methodology of arriving at the quantity of loose stock. However, he could not explain the various discrepancies in the statement prepared by him which did not match with the figures in the RG-I Register, as RG-I Register was not having any column regarding the quantity manufactured or packed during the day and quantity fully manufactured but still lying loose. He also agreed that there was contradiction in the stand taken by the respondents by stating that all the fabrics was yet to under go the processing of stentering, whereas in his written submissions he indicated v....

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....tement submitted by the ld advocate at the time of hearing Even otherwise we are in agreement with the plea taken by the Jt. CDR that in case of textiles, every process undertaken amounts to manufacture as per the chapter notes and therefore, 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....