Commissioner Of C. Ex., Chennai vs Indian Organic Chemicals Ltd.

The Customs, Excise & Gold (Control) Appellate Tribunal held that under Rule 56A of the Central Excise Rules, the intermediate product 'Tow' can be cleared without payment of duty if the final product is not exempt from excise duty. The Tribunal interpreted Notification No. 191/85 to mean that duty is only chargeable at one stage, either at the Tow stage or the Polyester Fibre stage, thus allowing the appeal and confirming that no duty is chargeable on Tow used in the manufacture of Polyester Fibre cleared under the notification. The Tribunal deemed the subsequent Notification No. 76/92 as clarificatory and having retrospective effect.