VADILAL EMBROIDERY UNIT Vs. UNION OF INDIA

JUDGEMENT

(1.) PETITIONER No. 1 is a registered partnership firm carrying on the work of embroidery on cotton fabrics. The petitioners bring cotton fabrics into their factory from other factories by following the procedure prescribed under Rule 96dd of the Central Excise Rules, 1944 (hereinafter referred to as "the Rules") without payment of duty, for the purpose of embroidery subject to the observance of procedure prescribed under the Rules. It is submitted that Rule 96dd of the Rules permits removal of cotton fabrics from one factory to another factory for embroidery without payment of excise duty after compliance with the procedure under Rule 156a.

(2.) IT is the contention of the petitioners that for the purpose of carrying out embroidery work they bring into their factory premises cotton fabrics which may be either duty-paid or non duty-paid. After the embroidery work is over, if the petitioners intend to remove the said fabrics for home consumption they pay duty on the base fabrics under AR-1 and if the goods are to be exported, they remove it under bond AR-4.

(3.) UNDER Rule 96zi of the Rules, excise duty liability on embroidery is discharged under compounded levy system. The duty liability on embroidery is discharged by debit entry before the starting of the shift when the base fabric is issued for embroidery. The duty liability is to be calculated at appropriate rate fixed under Notification No. 211/82 dated 31st August, 1982.