Case Law Details
Dhanesh Textiles Industries Pvt Ltd Vs Commissioner of Central Excise Mumbai-V Commissionerate (Bombay High Court)
Bombay High Court held that identify the nature of the goods as to whether they are finished or semi finished based on the entries in the RG-1 register needs reconsideration by the Appellate Tribunal.
Facts- The Appellants are engaged in processing of fabrics on job work basis. Till 16 December 1998, the said processed fabrics were chargeable to duty at advalorem rates of 12% Basic Excise Duty. The Appellants are engaged in the processing of cotton fabrics and man made fabrics falling under Chapter 52, 54, 55, 58 & 60 respectively of Central Excise Tarrif Act, 1985 (“CETA”) and were holding valid C.Ex. Registration Certificate.
The Appellants’ stock of manufactured fabrics and semi-finished fabrics was ascertained by the Central Excise officers and got them recorded in the RG-1 register and the same was certified under the signature of the Central Excise officer. This was in the context of change in position of law, that till 16 December, 1998 processed fabrics were chargeable to duty at advalorem rates of 12% Basic Excise Duty u/s. 3 of the CEA read with the CETA. Post 16 December 1998, by virtue of Notification dated 10 December 1998 issued under Section 3A of CEA, the specified fabrics were brought under Compounded levy scheme. As per paragraph 2(a) of the said Notification, the scheme was not applicable to such goods produced or manufactured prior to 16 December 1998 and cleared on or after that date.
Accordingly to the Appellants, the Appellants held stock of 24,437.90 LM as on 15 December 1998 and 47,840.65 LM of semi-finished condition. As regards the cotton fabrics, the Appellants held stock of 74,699.50 LM manufactured and 1,15,744.55 LM semi finished condition. This according to the Appellants was the stock position held at 24:00 hrs on 15 December 1998 as per RG-1 Register. According to the Appellants, the Appellants had given break of the same as finished goods and balance was quantified as semi finished goods in the RG-1 Register and the aforesaid stock was declared under letter to the Superintendent, Central excise, Range-07, Division Goregaon, Mumbai.
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