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2016 (3) TMI 301 - CESTAT AHMEDABADDue Drop Process on Fabrics - Manufacture - duty demand - whether Due Drop Process on Fabrics will amount to manufacture and whether the Appellant's belief that it did not amount to manufacture is “bonafide belief” - Held that:- Dew Drop Process was brought into the country in August 2000 from Korea. As gone through the write-up on the process of Dew Drop as well as the Certificate submitted by the Appellant in Appeal Memorandum which is from Dr.R.S. Gandhi, Textile Technologist and ex-Director (Mantra) (Man-made Textile Research Association), Surat. We find that the process does not have a long lasting effect and does not amount to transformation of the fabrics. It is more in the nature of enhancing the attributes or attractiveness of the fabrics. The effect also gets washed away by 3-4 simple washes. Under these circumstances, we can not find any fault with the Appellants having a bonafide belief that during the relevant period the process did not amount to manufacture and that they are not liable to Central Excise duty. It is also observed that the Department noticed the alleged duty evasion in January 2001, yet they issued the Show Cause Notice only on 01.04.2005, after almost 4= years. It is also noticed that the South Gujarat Due Drop Processors Association had also taken up the matter with the Ministry of Finance and Ministry of Textiles that the process of Dew Drop does not amount to manufacture and Central Excise duty is not leviable on the same. It is seen that the Ministry in its wisdom, has accepted the merits of the case and has exempted the process of Dew Drop from levy of Central Excise duty. The demand of Central Excise duty on the process of Dew Drop for the period August 2000 to December 2000 on the Appellant cannot be sustained. - Decided in favour of assessee
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