Jarmaaks Soft Tex (P) Ltd vs Commissioner Of Central Excise

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH CHENNAI

Appeal No.E/1504/2004

[Arising out of Order-in-Appeal No.199/2004 dt. 25.11.2004 passed by the Commissioner of Central Excise (Appeals), Madurai]

Jarmaaks Soft Tex (P) Ltd. Appellant

Versus

Commissioner of Central Excise, Madurai Respondent

Appearance:

Shri M. Kannan, Advocate For the Appellant

Shri R. Subramaniyan, AC (AR) For the Respondent

CORAM :

Honble Shri R. Periasami, Technical Member Honble Shri P.K. Choudhary, Judicial Member

Date of Hearing/Decision : 12.6.2015

FINAL ORDER No.40668/2015

Per R. Periasami

Appellants are manufacturer of textile products and falling under Chapter Sub-heading 6307.90. Appellant procured the cotton yarn without payment of duty in terms of Notification No.43/2001 CE (NT) dt. 26.6.2001. The condition of the notification is that the appellant has to fulfil export obligation of exporting their final products. The appellants have manufactured terry towel fabrics and supplied to 100% EOU who in turn exported the terry towels. The adjudicating authority in his order dt. 26.9.2003 dropped the proceedings and Revenue preferred appeal to Commissioner (Appeals) who confirmed the demand of Rs.1,19,679/.

2. Ld. Advocate for the appellant submits that appellants availed the benefit of notification No.43/2001 for procurement of yarn without payment of duty and utilised the same for manufacture of terry towels fabrics and they are regularly exporting the terry towels. In this particular case, the terry towel fabrics was supplied to a EOU M/s.Sheena Textiles, Surat, an EOU who has in turn exported terry towels. The terry towels supplied to EOU is to be construed as proof of export. He relied on this Tribunals decision in the case of Jansons Clothing Vs CCE Salem vide Final Order No.40400-40401/2015 dt. 8.4.2015 wherein this Tribunal on identical issue covered by Notification No.43/2001 rejected the Revenues appeal and allowed the assessees appeal.

3. On the other hand, Ld. AR submits that supplies to EOU is not an export and cannot be construed as deemed export and relied Boards circular dt. 7.4.2004 and relied on the following decisions :-

(1) BAPL Industries Ltd. Vs UOI - 2007 (211) ELT 23 (Mad.) (2) Jumbo Bags Ltd. Vs CC Chennai -2011 (268) ELT 81 (Tri.-Che.)

4. After hearing the submissions of both sides, we find that the L.A.A in the impugned order at para-25 admitted the fact that terry toweling fabrics supplied to the EOU have been exported after undertaking further processing into garments and also they have submitted proof of export. In the present case, appellant has supplied terry towel fabrics to another EOU for further processing. The only condition in the notification is that appellant has to produce proof of export of the final product. In the present case, as the LAA has clearly brought out that there is no dispute that the goods have been cleared to EOU and appellants have produced proof of export through EOU. This Bench has already in an identical issue in the case of Jansons Clothing Vs CCE Salem (supra) has held in para-3 and 4 as under :-

"3. Controversy in this appeal is reduced to the point as to whether notification has to be interpreted to mean that export has to be made by th appellant only or the goods are to be exported. The spirit of the notification being to export the goods manufactured using duty free raw material irrespective of the person who exported the same there should not be controversy to bring the appellant to the jaws of the levy. Added to this, the appellant was granted permission for clearing the duty free raw material for use in export of the finished goods supported by proof of export, appellant succeeds. Appeal is allowed accordingly.

4. In view of the above decision, Department's appeal is dismissed waiving levy of penalty."

5. Accordingly, by following decision of this Bench of the Tribunal and also in view of consistent view of the Tribunal, the assessees appeal is allowed. Impugned order is set aside. Appeal is allowed.

(Dictated and pronounced in open court)

(P.K. CHOUDHARY) (R. PERIASAMI) JUDICIAL MEMBER TECHNICAL MEMBER

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