PerV.K. Agrawal :

In these three appeals, arising out of a common Adjudication Order No. 1/Commr/M-1/2001 dt. 2.1.2001, the issue involved is whether Turn Over Tax @ 2% is deductible from the assessable of the excisable goods manufactured by M/s. Modipon Fibre Co. even in cases where the goods were sold to 'backward area' customers as the rate of Turn Over Tax is only 0.25%.

2. Shri J. Vellapally, Ld. Senior Advocate, submitted that M/s. Modipon Fibre Co., Appellant No. 1, manufacture Nylon and Polyester Yarn which is cleared by them to their various depots situated all over India from where the yarn is sold to dealers/customers; that they pay the duty at the time of removal of yarn on the basis of the Depot sale price after claiming permissible deductions under Section 4 of the Central Excise Act; that one of the such deduction is Turn Over Tax (TOT); that in respect of yarn cleared to their Surat Depot in the State of Gujarat, they claimed deduction @ 2% on account of TOT; that the Government of Gujarat by a Notification dt. 19.10.93 exempted sale of yarn of all kinds by a registered dealer to a special manufacturer of processed yarn or to an eligible unit to the extent of whi