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2019 (1) TMI 1858 - AT - Service TaxScope of coverage under Central Excise Act, 1944 - processor undertaking printing and stentering of ‘terry towel fabric’ without aid of power - Applicability of Note 7 in Chapter 58 of the First Schedule to Central Excise Tariff Act, 1985 - HELD THAT:- The appellant, if undertaking the two processes without aid of power, would not be liable to duties of excise as a manufacturer. It is not in dispute that the appellant works on running the length of fabric which is printed and stenterized. It would appear from the findings that the allegation of use of power has been upheld solely because light is used for inspection of the printed fabric. That is not the intent of the said note in chapter which must be inextricably connected with the process. It has been held in re Swastik Dyeing & Bleaching Factory [2003 (12) TMI 206 - CESTAT, MUMBAI] that, insofar as cotton fabric is concerned, stentering involves mere drying; there is no evidence that any power source is utilised for such drying. Appeal allowed - demand as well as penalty set aside - appeal allowed by way of remand.
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