9911796707
TMI Blog1999 (3) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... nts and the Revenue authorities about the classification of different types of wastes arising in the course of manufacture of PSF. The said wastes are (1) undrawn waste, (2) crimped uncut waste and (3) cut and process waste. 1.3 At the initial stage, a show cause notice dated 21-7-1987 was issued to the appellants demanding duty on the aforesaid three types of wastes as under :- Undrawn waste Rs. 73,70,061.88 Crimped Uncut waste Rs. 14,63,217.81 Cut & Process waste Rs. 4,11,809.07 Another show cause notice dated 3-1-1989 was also issued demanding duty on crimped uncut waste cleared during the period from 5-8-1987 to 24-7-1998. 1.4 After visiting the factory of the appellants on 18-11-1990 and after studying the process of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure A1 to A6 of the show cause notice relating to samples drawn from PSF). Generally the test report from the PSF as mentioned in Annexures A1 to A6 reads as follows :- "The sample is in the form of lustrous white mass. It is composed wholly of man-made synthetic (polyester) staple fibre". The show cause notice also relies on six test reports in respect of samples taken from declared `cut and process waste' annexed as Annexures B1 to B6. In two of the test memos relating to the samples dated 15-4-1989 and 12-9-1989 and declaration of the appellants herein was of cut and process waste and the report thereon is similar to the report on sample from PSF, as mentioned above. In the subsequent test memos dated 12-9-1989, 4-12-1989, 24-1-1990, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 24-12-1992. The said letter, as alleged in the show cause notice, states that "fibre from the bales is regularly tested from cut length long fibres and stringiness and in case it is not within the desired specifications is graded as `C' grade fibres." It is thus alleged on the basis of this letter that variation in fibre length is accordingly accepted by the appellants as second grade fibre instead of rejecting it as waste. It is further alleged that Chapter Note 3 of Chapter 55 of the CETA, 1985 specifically states that sub-heading 5501.19 applies only to waste arising in or in relation to the manufacture of man-made staple fibre. It is alleged that this sub-heading covers waste arising upto the stage of obtaining staple fibres. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings now initiated by the show cause notice dated 9-2-1993 and adjudicated upon by the impugned order are untenable. 2.1 It is further submitted that from the test reports given by the Chemical Examiner, as mentioned in detail, it cannot be concluded that cut and process waste is not a waste but good PSF. The test reports have merely stated that cut and process waste is free of fused fibres and of extraneous matter. However, from this it cannot be concluded that it is sound PSF and it is not waste. 2.2 It has also been urged that necessary criteria of determining the cut and process waste is set out in circular issued by the Board, supra which is wrongly described by the Chemical Examiner as notification in the test reports. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L.T. 998 (Tribunal)]. 3. We have carefully considered the pleas advanced from both sides. We find sufficient force in the several pleas of the learned Advocate for the appellants. Keeping in view the detailed order dated 11-1-1991 passed by C.C.E., Allahabad particularly after visiting the factory, finalisation of RT 12 in pursuance of the said order of the Collector, it was totally unnecessary for the Collector in the present proceedings to issue a fresh show cause notice seeking to revise the earlier opinion based on the old test reports themselves drawn on 1989 and 1990. We also observe that there is a total mis-application of the Board's directions dated 18-12-1989. It is appropriate to extract para 3 of the said circular dated 18 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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