Jct Ltd. Vs. Collector of Central Excise

1. in this case a duty demand of rs. 11,92,213/- has been confirmed as cess on grey fabrics cleared for captive consumption for processing by the appellants herein during the period 1-4-1986 to 19-3-1990. in addition a penalty of rs. 25,000/- has been imposed on the goods leviable to cess under the provisions of khadi and other handloom industries development (additional duties of excise on cloth) act, 1953.2. on hearing shri j.p. kaushik, learned advocate and shri r.s. sangia, learned dr we agree with the learned counsel that the decision of the tribunal in the case of c.c.e., new delhi v. kumar textiles reported in 1996 (17) rlt 157 holding that cess on processed cloth is not leviable if already paid on the grey cloth, is applicable to the facts of this case, where cess has been paid on processed cloth and the demand relates to cess on grey fabrics cleared for processing. following the ratio of the above decision, we hold that the, appellants are not liable to cess on the grey fabrics which have been cleared for processing and the, processed fabrics have been cleared after payment of cess. in the result, we set aside the impugned order relating to duty and penalty and allow the appeal.