P.S. Bajaj, Member (J)
1. In this appeal the appellants have challenged the validity of the Order-in-Appeal dated 10-2-2000 passed by the Commissioner (Appeals) vide which he had affirmed the Order-in-Original dated 30-3-1998 confirming duty of Rs. 58,011/- on them.
2. The appellants had been settled with the duty demand of Rs. 58,011/- for having not discharged the duty liability at the single yarn stage but paid duty on the doubled yarn. The Commissioner (Appeals) accepted the view of the Assistant Commissioner that the duty liability was required to be discharged by the appellants at the single ply yarn stage being a manufactured product and not at a later stage when it was doubled or multifolded, by applying the ratio of the law laid down in C.C.E. v. Banswara Syntex Ltd. [1996 (88) E.L.T. 645 (S.C.)]. He also accepted the waste percentage of 0.35% as fixed by the Assistant Commissioner for determining the weight of the single ply yarn for the purpose of levy of duty.
3. The appellants have challenged the impugned order of the Commissioner (Appeals) in the present appeal before us.
4. The learned Counsel while challenging the validity of the impugned order has referred to the observations of the Commissioner (Appeals) in paras 4(5) and 8 of the order. In para 4(5), the learned Commissioner had observed as under :-
“During this period Modvat credit was extended to yarns of Chapters 52 to 55 vide Notification No. 24/94-C.E. (N.T.). The manufacturers could have availed of credit if duty was paid on single yarn but the manufacturers continued to pay duty on doubled yarn as therefore. However, here against duty actually paid on doubled yarn was far in excess of duty on waste @ 0.35% as demanded because of value addition and duty being chargeable at ad valorem rates. The value addition on account of doubling was approximately Rs. 5/- per Kg. in the case of cotton yarn and Rs. 10/- per Kg. in the case of blended yarn of polyester/viscose.”
In para 8, the learned Commissioner (Appeals) has observed as under :-
“In some cases where the appellants had already paid duties at the doubling stage, full duty has again been demanded at the single ply stage also without giving them any benefit of the duty already paid at the doubling stage. In view of the Supreme Court decision in the case of Banswara Syntex Ltd. (supra) holding that duty is not payable at the doubling stage, duty so paid would have to be adjusted against the duty demanded at the single ply stage. Wherever this has not been done as mentioned in the Chart below the impugned orders are set aside to that extent and the cases are remanded back to the adjudicating authorities for re-computing the amount after giving such benefit.”
The Counsel has contended that in view of these observations, the Commissioner (Appeals) should have remanded the case to the Assistant Commissioner for redetermining the duty amount as the appellants are entitled to the readjustment of the duty amount already paid on the doubled yarn instead of affirming the Order-in-Original of the Assistant Commissioner.
5. On the other hand, the learned SDR has only reiterated the correctness of the order of the Commissioner (Appeals).
6. We have heard both the sides and gone through the record.
7. The bare perusal of the impugned order of the Commissioner (Appeals) shows that the appellants had paid the duty on the doubled yarn though they were liable to pay on single ply yarn. According to the observations of the Commissioner (Appeals) as recorded by them in paras 4(5) and 8 of the order (reproduced above), they were entitled to the adjustment of the duty so paid, while determining their duty liability which they were required to discharge at the single yarn stage. Therefore, in the light of his own these observations, the Commissioner (Appeals) should have remanded the case to the Assistant Commissioner for redetermining the duty liability of the appellants after allowing them the adjustment of the duty already paid by them, instead of dismissing their appeal. That being so, the impugned order passed by him cannot be sustained and deserves to be set aside.
8. In the light of the discussion made above, the impugned order of the Commissioner (Appeals) is accordingly set aside and the matter is sent back to the adjudicating authority for determining the duty liability of the appellants in accordance with law and keeping in view the duty already paid by them as per the observations of the Commissioner (Appeals) in the impugned order after hearing both the sides.
9. Appeal stands disposed of accordingly by way of remand.