VIMAL TEXTILE MILLS Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) The issues involved in this Appeal, filed by M/s. Vimal Textile Mills, are whether they were using power in the processing of the fabrics, whether Notification No. 35/99 -CE, dated 4.8.99 which amended Notification No. 5/99 -CE, is applicable retrospectively and whether the Proviso to Section 11 A(l) of the Central Excise Act is invocable for demanding Central Excise duty for the extended period.

(2.) Shri B.L. Narasimhan, learned Advocate, mentioned that the Appellants process cotton fabrics falling under Chapter 52 of the Schedule to the Central Excise Tariff Act since 1984; that they undertake bleaching, dyeing and printing on the cotton fabrics; that proceedings were initiated by show cause notice dated 2.7.1999 proposing to deny the benefit of the exemption on the ground that they were using ceiling fans in the halls for drying the fabrics, using motor for drawing water for use in the factory and using power for stirring of chemicals; that the Commissioner, under the impugned order has confirmed the demand of duty for the period June 1994 to May 1999 and has imposed equal amount of penalty.

(3.) The learned Advocate submitted that the Appellants had availed of benefit of Notification No. 28/94 -CE, dated 1.3.94, Notification No. 8/96 -CE dated 23.7.96, Notification No. 4/97 -CE, dated 1.3.97 (Serial No. 85), 5/98 -CE, dated 2.6.1998 (Sl. No. 106) and 5/99 -CE, dated 1.3.99 (Sl. No. 102); that all these Notification granted exemption to the cotton fabrics processed without the aid of power or steam; that they were undertaking the activities of bleaching, mercerizing, dyeing, printing, washing, drying and finishing before the fabrics were actually packed and cleared; that in respect of these processes, they had not used any power. He mentioned that the Larger Bench of the Tribunal in the case of Mathania Fabrics v. CCE, Jaipur, 2002 (142) ELT 49 (T -LB) has held that it cannot be claimed that power is not used in the processing of fabrics "when power is used for lifting water and pouring the same in the kier and bleaching vessels .. The pouring of water into kier and bleaching vessels are steps integrally connected with the whole process." He fairly mentioned that in view of the decision of the Larger Bench of the Tribunal, he is not contesting the plea that the power has not been used by the Appellants is processing the fabrics.