TMI Blog1998 (7) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The Commissioner further confirmed a demand of duty of Rs. 1,72,694.26 from the appellants through official liquidator for wrongful availment of benefit of Notification No. 77/83-C.E., dated 1-3-1983 for the period 1984-85. He also confiscated 132 bichhona sets, 17 packages containing 204 bichhona sets, 40 cartons containing bed sheets, pillow covers, top sheets etc. and 38 cartons containing bed sheets, pillow covers etc. He also gave an option to the appellants through official liquidator to redeem these confiscated goods on payment of redemption fine of Rs. 1.50 lac with the direction that this option may be exercised within 30 days of receipt of this order. He also imposed a penalty of Rs. 25 lac on the appellants. Against this order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed. The same were also seized in the reasonable belief that they were relevant and pertained to the goods which were liable to confiscation. 3. On scrutiny of the documents seized and the statements of the various persons, it was found that the appellants had evaded duty amounted to Rs. 43,52,716.34 during the period 1-4-1984 to 31-5-1985 and that there was wrongful availment of duty of Rs. 1,72,694.26. Accordingly a show cause notice was issued to the assessees asking them to explain as to why the duty should not be demanded from them, why the goods found at various places should not be confiscated and why a penalty should not be imposed on them. 4. After examination of the records of the case as the appellants had not availed the opp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roidery in the piece, in strips or in motifs, fabrics impregnated, coated or laminated with preparations of cellulose derivatives or of other artificial plastic materials, and fabrics covered partially or fully with textile flocks or with preparations containing textile flocks, such predominance or percentages, as the case may be, shall be in relation to the base fabrics which are embroidered or impregnated or coated or laminated or covered, as the case may be - I. Cotton fabrics, other than (i) embroidery in the piece, in strips or in motifs, (ii) fabrics impregnated, coated or laminated with preparations of cellulose derivatives or of other artificial plastic materials, and (ii) fabrics covered partially or fully with textile flocks o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f duty on these items again once the duty was paid on cotton fabrics in running length. He, therefore, submitted that the impugned order may be modified to the extent stated above and the penalty may be reduced drastically. 6. Sh. S. Srivastava, ld. JDR appearing for the Revenue submitted that in this case the admitted position is that the cotton fabrics in running length is purchased by the appellants and that these cotton fabrics is cut into small pieces and these pieces are given a definite shape of articles of cotton fabrics after stitching and hemming the corners thereof. He submitted that therefore the issue in the case boils down to consider whether this cutting, stitching and hemming amount to manufacture. He submitted that conver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty was paid on cotton fabrics in running length under the same sub-heading or heading. He also referred to the decision of the Tribunal in the case of Ramaraju Surgical Cotton Mills [1996 (82) E.L.T. 86]. He submitted that the Tribunal in this case observed that converting loose woven fabrics into gauze bandage is manufacture and the goods so produced are classifiable under Heading 30.04 of the Central Excise Tariff. He submitted that this decision of the Tribunal squarely covers their case. He submitted that cutting of fabrics in running length into small length and stitching and hemming them into article is nothing but the manufacture and since the process undertaken for the production of articles amount to manufacture, therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nes cotton fabrics, therefore, the question of considering whether the manufacture has taken place or not. To say the least every process does not amount to manufacture. Only such process as bring into existence a new product distinct in name, character and use amounts to manufacture. In this case definition of cotton fabrics deeming fiction is that the bed sheets, bed spreads and table cloths are cotton fabrics and therefore if the duty has been paid on the goods as cotton fabrics then the duty shall not be liable to be paid on the bed sheets, bed spreads and table cloths. In this view of the matter, we hold that no further duty shall be payable on the above items. 10. Having regard to the above findings, we find that the penalty is on t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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