ARIHANT COTSYN LTD. Vs. CCE, CHANDIGARH

JUDGEMENT

(1.) THE issue involved in this appeal is the dutiability of cotton softwaste prior to the amendment of Chapter 52 of Central Excise Tariff w.e.f. 26.5.95.The issue has come before this Larger Bench on account of difference of opinion among Division Benches.

(2.) THE relevant facts are that Chapter heading 25 was amended in the Finance Bill, 1995.The heading at it stood before and after the amendment read as under: - -

(3.) THE appellants are a 100% EOU engaged in the manufacture of cotton yarn, out of cotton.Various types of waste items arise in the processing of cotton and manufacture of yarn. Show cause notice dated 7.8.95 was issued to the appellant as to why duty should not be demanded from them in respect of waste products.The show cause notice was adjudicated by the Dy. Commissioner at Ludhiana under his order in original No.22 -24/CE/DC/97 dated 16.7.97. He held that no duty was payable in respect of soft waste cleared prior to 26th May 95. In respect of the other types of waste,namely,hard waste duty demand was confirmed.Duty demand was confirmed.Duty demand on soft waste cleared subsequent to 26th May 95 was also confirmed. An appeal was filed against this order by the department before the Commissioner (Appeals), Pointing out that the order of adjudication was in error in not confirming duty demand in respect of soft waste for the period prior to 26th May, 95. The Commissioner accepted the appeal and passed the following order.