ORDER
T.K. Jayaraman, Member (T)
1. This appeal has been filed against Orders-in-Appeal No. 109/2005 CE to 110/2005 CE dated 13.9.2005 passed by Commissioner of Customs and Central Excise (Appeals), Cochin.
2. Shri K.T. Antony, Managing Partner appeared on behalf of the appellants and Shri K. Sambi Reddi, learned JDR for the Revenue.
3. We heard both sides. The appellants manufacture “cotton hosiery undergarments” falling under 6101.00 under the brand name ‘Kunnath’. They were availing SSI exemption under Notification No. 8/2003 dated 1.3.2003. The impugned product is also specified under the said Notification. In order to produce the final product, they were manufacturing intermediate product “processed wrap and circular knitted cotton fabrics” (6002.42 & 6002.92) with the aid of power. As the said item is not covered by any exemption, the same is chargeable to duty. Revenue proceeded against them for non-payment of duty on the said intermediate products for the period from 1.4.2003 to 30.9.2003. The Original Authority confirmed duty amount of Rs. 3,33,419/-. He had also allowed cenvat credit of Rs. 2,11,314/- on the raw material consumed. A penalty of Rs. 10,000/- was also imposed. The appellants filed an appeal to the Commissioner (A) against the Order-in-Original dated 20.9.2004. Revenue also filed an appeal to the Commissioner (A) against the said order. The Commissioner (A) rejected both the appeals by upholding the Order-in-Original dated 20.9.2004. As the appellant is aggrieved over the impugned order, they have come before this Tribunal for relief.
4. Relying on the following decisions, the learned JDR stated that the legal position is very clear and since the final products are exempted, the intermediate products would not be entitled for the benefit of Notification No. 67/95. He prayed that the impugned order should be upheld.
(i) Aurobindo Pharma Ltd. v. CCE, Hyderabad 2006 (205) ELT 199 (Tri.-Bang.)
(ii) Gujrat Sidhee Cement Ltd. v. CCE, Rajkot 2007 (216) ELT 56 (Tri.-Ahmd.)
(iii) Madhukar S.S.K. Ltd. v. CCE, Nasik
(iv) Associated Cement Co. Ltd. v. CCE, Chandigarh 2006 (206) ELT 329 (Tri.-Del.)
5. We have gone through the records of the case carefully. In this case, the final product is “cotton hosiery undergarments”. The fact that these goods are entitled for SSI exemption under Notification No. 8/2003 is not under dispute. The issue relates only to the dutiability of the intermediate product which is “processed wrap and circular knitted cotton fabrics” (6002.42 and 6002.92). These intermediary products do not find mention in the annexure to the said Notification No. 8/2003 during the relevant period. This is clear from the findings of the Original Authority in his Order-in-Original. He has clearly stated that the exemption available to the said fabric subject to any process was withdrawn with effect from 1.4.2003 by rescinding Notification No. 14/2003 dated 1.3.2003. As far as the exemption Notification No. 67/95 is concerned, the said exemption Notification would not be available to intermediary products when the final product is exempt from the whole of duty leviable thereon or are chargeable to nil rate of duty. In the present case, the final products are exempted for the first clearances upto value of Rs. 100/- lakhs. Therefore, the exemption Notification No. 67/95 will not be available to the intermediary product. When the final product is exempted, no exemption under Notification No. 67/95 would be available to the intermediate products. This is clear from the (Sic) decisions of the Tribunal relied on by the learned JDR cited supra. In these circumstances there is no merit in the appellant’s contention that the intermediary products should not be charged to duty. Hence, we reject the appeal and uphold the impugned order.
(Pronounced in open Court on 15.4.2008)