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2015 (4) TMI 774 - CESTAT NEW DELHIManufacturing activity or not - Crushing of fabrics - Marketability of product - Imposition of penalty - Held that:- Process of crushing results in permanent change in the fabrics and, hence, in view of Chapter Note 4 of the Chapter 55, this process would have to be treated as amounting to manufacture, as according to the Note 4 of the Chapter 55 in relation to the products of heading 5511, 5512, 5513 and 5514 the process of bleaching, dyeing, printing, shrink briefing, stentering, heat setting, crease resistance, processing or any other process or any one or more of these processes shall amount to manufacture and in our view the process of crushing would be covered by the expression any other process. In view of this, we do not find any infirmity in the impugned order holding that the process of crushing would amount to manufacture. Marketability - Held that:- Proprietors of the assessee firms themselves have accepted that the crush fabrics are saleable as such and are known in the market as crushed fabrics. Moreover there are number of internet websites of several manufacturers of crush fabrics which offer different verities of crushed fabrics for sale. Extended period of limitation - Held that:- Since the dispute in this case pertains to interpretation, no malafide can be attached to non-payment of duty by the assessees on the crush fabrics being cleared by them. In view of this, the penalty on both the assessees is set aside. - Decided partly in favour of assessee.
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