C T COTTON YARN LTD Vs. COMMISSIONER OF CENTRAL EXCISE INDORE
LAWS(SC)-2006-9-75
SUPREME COURT OF INDIA
Decided on September 22,2006

C.T.COTTON YARN LTD. Appellant
VERSUS
COMMISSIONER OF CENTRAL EXCISE, INDORE Respondents





Cited Judgements :-

GEM SPINNERS (INDIA) LTD. VS. CCE [LAWS(CE)-2008-1-52] [REFERRED TO]
CTO (A VS. DURGESHWARI FOOD LTD., SRIGANGANAGAR [LAWS(RAJ)-2011-12-125] [REFERRED TO]


JUDGEMENT

P. K. Balasubramanyan, J. - (1.)The appellant challenges the decision of the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi in A.No.E/1715-1716/97-D, dated 19.07.2000. By the said order the Tribunal substantially dismissed the appeals filed by the appellant, but reduced the penalty imposed on the appellant by the Original Authority.
(2.)According to the appellant, it is a 100% export oriented unit engaged in the manufacture and export of cotton yarn. It purchases cotton from the domestic market for the manufacture of yarn. After the cotton is purchased it is subjected to carding and combing and only thereafter it is spun into yarn. According to the appellant, carding involves opening and separating out of fibres together with effective cleaning and combing is a process by which impurities and undesired short fibres are removed. During carding and combing, the fibre and noils can be separated and they are collected in one place by suction. This, according to the appellant, is a waste generated at the preparatory stage and it is cotton waste. It is impure cotton fibre.
(3.)Earlier, the appellant was paying duty on this cotton waste before clearing it and selling it in the Domestic Tariff Area. On finding that certain similar other manufacturers were not paying duty on the waste cotton thus generated and disposed of in the Domestic Tariff Area, the appellant sought clarification from the Collector of Central Excise and Customs, Indore taking up the position that cotton waste was not dutiable. On 9.9.1993, the appellant was informed that soft cotton waste arising out of indigenous material would not attract excise duty. The appellant started clearing and selling the waste cotton without payment of duty. On 16.09.1993, the Department wrote a letter to the appellant to explain under what circumstances the appellant was clearing the soft cotton waste and selling it in the Domestic Tariff Area without payment of duty. It is the case of the appellant that based on the clarification as above, it filed a fresh clarification list dated 17.9.1993 declaring soft cotton waste as non-excisable item and it continued clearing the same without payment of duty and selling it in the Domestic Tariff Area. On receipt of the communication dated 16.09.1993 from the Department, the appellant took up the position that soft cotton waste was not liable to duty since it was only cotton waste removed from the cotton domestically purchased so as to enable the appellant to make the yarn for the purpose of export.


Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.