MODERN PETROFILS Vs. COMMISSIONER OF CENTRAL EXCISE, VADODARA

JUDGEMENT

(1.) THE appellant was engaged during the material period, in the manufacture of partially oriented yarn (POY) of polyester falling under CETH 5402 and polyester textured yarn (PTY)/PFY falling under CETH 5402 of CETA, 1985. PTY is manufactured by processing the POY.

(2.) NATIONAL Contingency Calamity Duty (NCCD) was levied as a duty of excise by way of surcharge vide Section 136 of Finance Act, 2001. The levy of NCCD was extended to the product i.e. yarns, manufactured by the applicant vide Section 169 of the Finance Act, 2003. It was levied at 1% ad valorem.

(3.) AS per the Notification No. 46/2003 -C.E. dated 17 -5 -03, goods falling under CETH 54.02 were wholly exempt from NCCD, if manufactured out of goods falling under CETH 54.02. Accordingly, the appellant was availing the benefit of exemption from June, 2003 onwards in respect of PTY manufactured out of POY, both falling under CETH 54.02. However, the PTY falling under CETH 5402 was liable to the basic excise duty.