Whether loosely assembled fiber web in roll form emerging at a stage before the exempted finished jute carpet, is marketable and therefore liable to excise duty

Last updated: 01 July 2014

Court :
Bombay High Court

Brief :
The Appellant is a manufacturer of products falling under Chapters 56 and 57 of the Central Excise Tariff Act 1985. According to the Department, the Appellant had not paid Central Excise Duty on the intermediate product viz. “non-woven fabrics” falling under CETH 5603, used captively for manufacture of “jute carpets” which are cleared at 'Nil' rate of duty. According to the Department, the Appellant was manufacturing the impugned product and using the same in the manufacture of “jute carpets” and “jute backed floor coverings”, assessable to 'nil' rate of duty. The Department contended that the impugned product attracted Excise Duty. Department issued show cause notices to the Appellant from 1991 to 2002, claiming that the impugned product that emerged as an intermediate product during the course of manufacture of jute carpets was a marketable product and duty was leviable though the final product namely jute carpets, was exempt from Excise Duty. The Appellant denied this allegation maintaining that the impugned product was neither marketed nor marketable claiming that the goods sold by them as “non-woven fabric” on payment of duty during the period of dispute were different from the impugned product referred to in the show cause notices.

Citation :
M/s Hitkari Hitech Fibres Pvt.Ltd. Appellants Versus - The Commissioner of Central Excise Respondent