Order Date – 21 December 2022

Facts –

• The Appellant M/s. Jindal Texofab Ltd, is engaged in the processing of cotton fabrics falling under chapter 52. 
• A show cause notice was issued alleging that during the period March 2001 to May 2001 a quantity of 11,12,820 L meters of fabrics which was hand dyed/bleached/printed at M/s. Shrinathji textiles was sent to M/s. JTL’s factory for Stentering and that such process of Stentering carried out with aid of power attracted central excise duty, but was cleared from JTL’s factory without payment of duty.

Issue –

• Whether M/s. JTL is liable to central excise duty in relation to finishing process of stentering of fabrics?

Order –

• The Tribunal observed that on perusal of records it transpires that it is not the case in the show cause notice that the Appellant carried out process other than stentering nor is there a specific case or evidence referred in the SCN that M/s. JTL carried out processes on the fabric falling under chapter 54 & 55 of CETA, 1985 which otherwise also do not specifically include stentering as a process amounting to manufacture.
• In absence of such a case in the SCN and in absence of evidence to show that M/s. JTL carried out process other than stentering of fabrics falling under chapter 52 or carried out process on the fabric falling under chapter 54 or 55, demand of duty as against M/s. JTL cannot be sustained.
• Since duty demand cannot be sustained, penalties upon the appellants are also liable to be set aside.