M/S. C.T. COTTON YARN LTD. vs. COMMNR. OF CENTRAL EXCISE, INDORE

C.A. No.-006451-006452 - 2000Supreme Court22 September 20064 pages
For Respondent: P. PARMESWARAN
AI SummaryRemanded

What did the Supreme Court hold?

The Supreme Court held that the question of whether cotton waste generated during the manufacturing process is a dutiable manufactured product requires reconsideration. The Court set aside the Tribunal's order and remanded the appeals for a fresh decision on this specific issue.

What were the facts?

The appellant, a 100% export-oriented unit, generated cotton waste during the manufacture of yarn from domestically purchased cotton. The appellant initially paid duty on this waste but later stopped after receiving clarification that it was not dutiable. Subsequently, the Finance Act, 1995, introduced a heading for cotton waste, leading to excise duty demands and penalties.

What were the issues?

Whether cotton waste generated during the manufacturing process of yarn is a dutiable manufactured product, and whether the extended period of limitation under Section 11A of the Act was rightly invoked by the department.

Which sections of the Income-tax Act were involved?

Section 3(1),Section 11A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 4 CASE NO.: Appeal (civil) 6451-6452 of 2000 PETITIONER: M/S C.T. COTTON YARN LTD RESPONDENT: COMMISSIONER OF CENTRAL EXCISE, INDORE DATE OF JUDGMENT: 22/09/2006 BENCH: ASHOK BHAN & P.K. BALASUBRAMANYAN

JUDGMENT: J U D G M E N T 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.

The order continues below.

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