TMI Blog2000 (11) TMI 790X X X X Extracts X X X X X X X X Extracts X X X X ..... tment had sought to classify the yarn in question under sub-heading No. 5504.29 or sub-heading No. 5506.29 of the CET. On this issue of classification, the Revenue has come up in appeal. The appellate authority had also held that the benefit of exemption Notification No. 47/90-C.E. dated 20-3-1990 was not available to M/s. Tirupati and that the extended period of limitation has been correctly invoked in demanding the central excise duty. On this the benefit of exemption notification and limitation, M/s. Tirupati had filed the appeal. The Commissioner of Central Excise (Appeals) had set aside the penalty of Rs. 30,000/- imposed by the Addl. Commissioner of Central Excise who had adjudicated the matter. This part of the order has also been challenged by the Revenue. 2. Both the appeals were heard together on 5-10-2000 when Shri K.K. Anand, advocate, appeared for M/s. Tirupati. Shri S.N. Singh, SDR, appeared for the Revenue. Shri K.K. Anand, advocate, submitted that on merits the impugned order-in-appeal was in favour of M/s. Tirupati and that without any discussion, the order had been passed against the manufacturer with regard to their entitlement to the benefit of exemption N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial (viscose) staple fibre, or any one or more of these fibres (not containing any other textile material), and in which the proportion of polyester staple fibre was less than 70% by weight of the total fibre content. Sub-heading No. 5506.21 of the CET covered yarn containing artificial (viscose) staple fibre and polyester staple fibre (not containing any other textile material), and in which the proportion of polyester staple fibre was more than 40% by weight of the total fibre content. Sub-heading No. 5504.29 relates to other yarn of synthetic staple fibres in which polyester staple fibre pre-dominated (other than those already classifiable under sub-heading Nos. 5504.21 and 5504.22). Sub-heading No. 5506.29 covered other yarn of artificial staple fibre containing synthetic staple fibres (other than those already classifiable under sub-heading No. 5506.21). M/s. Tirupati only manufactured spun yarn. They did not manufacture filament yarn. The yarn manufactured by M/s. Tirupati was got classified under the above sub-heading No. 5504.22 and sub-heading No. 5506.21 of the CET. No duty was paid at this stage before these yarns were used in the factory for doubling with the filam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterials not classified in that Chapter. If the classification of a yarn cannot be determined under the above Section Note 2(A) or 2(B) under Section XI of the CET, for the reason that two or more of the various fibres or yarns were equal in weight in such yarn, then it was provided in Section Note 2(C), then such one of those fibres or yarns, the predominance of which would render such yarn fall under the Chapter or Heading which attracts the highest amount of duty payable, shall be deemed to be predominant in such yarn and accordingly such yarn was to be deemed to fall under the applicable Chapter or Heading determined in the above manner. 7. In the doubled yarn in question, one ply of yarn of synthetic (polyester) staple fibres, or yarn of artificial (viscose) staple fibres containing synthetic (polyester) staple fibres, as the case may be, manufactured by M/s. Tirupati, but on which no central excise duty had been paid, was doubled with another ply of brought out filament yarn of polyester or viscose for which there were no duty paying documents. The assessee had paid duty on the total weight of the doubled yarn ignoring the presence of polyester or viscose filament yarn fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zed Commodity Description and Coding System (HSN) Man-made Staple Fibres are described as under - The General Explanatory Note to Section XI should be taken into account in reading the Explanatory Notes to this Chapter. The Chapter covers the man-made fibres described in the General Explanatory Note to Chapter 54 when in the form of staple fibres (i.e., discontinuous fibres) or of certain filament tow; also covers the products arising at the various stages of working these fibres or tow, up to and including yarn and woven fabrics. It further includes mixed textile products classified as products of man-made staple fibres by application of Note 2 to Section XI. Man-made staple fibres are usually manufactured by extrusion through spinnerets (jets) having large number of holes (sometimes several thousand); the filaments from a large number of spinnerets (jets) are then collected together in the form of a tow. This tow may be stretched and then cut into short lengths, either immediately or after having undergone various processes washing, bleaching, dyeing, etc.) while in the tow form. The length into which the fibres are cut usually between 25 mm and 180 mm and varies accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yarn in the ratio of 48% polyester and 52% viscose, the Tribunal referred to Section Note 2(A) under Section XI of the Tariff and held the same as classifiable under sub-heading No. 5506.29 of the Central Excise Tariff. 10. In the case of CCE, Jaipur v. Banswara Syntex Ltd., 1996 (88) E.L.T. 645 (S.C.), the Supreme Court observed in para 7 of their judgment that mere doubling or multifolding of the single yarn which is manufactured does not bring into existence a new product. The single yarn which is manufactured is an excisable item and would be subject to duty upon its manufacture. In the present case doubling was not of the single yarn. Herein one ply of yarn of synthetic (polyester) staple fibre, or yarn of artificial (viscose) staple fibre containing synthetic (polyester) staple fibres, as the case may be, was doubled with another ply of bought out filament yarn of polyester or viscose. Thus, the facts in the present case are distinguishable. 11. On classification, the learned Commissioner of Central Excise (Appeals) had recorded cryptic order without discussing the goods in question, the allegations, submissions, case law etc. He had recorded as under :- I have gon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L.T.]. 16. M/s. Tirupati had not paid any central excise duty on the yarn manufactured by them before it was used in the manufacture of doubled yarn. The adjudication authority had recorded as under - Admittedly, the assessee has not paid duty on the polyester/viscose blended yarn manufactured in their factory by doubling/multifolding the same. The filament yarn brought from outside was without the cover of duty paying documents. Thus the benefit of Notification No. 47/90-C.E. has been correctly denied to them by the Commissioner of Central Excise (Appeals). 17. Filament yarns received from outside were recorded in the raw material receipt register as filament . Filament is not the same as filament yarn. Filament is a fibre from which the filament yarn could be made. In the Fairchild s Dictionary of Textiles, 6th Edition, at page 234 Filament and Filament Yarn are defined as under - Filament. - A fiber of indefinite or extreme length, e.g., silk filament, which runs from 300 to 1400 yards (274 to 1280 m) and more in length; the extreme length of filament permits their being used in yarn without twist or with very tow twist, and they are generally made into yarn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of facts for the purposes of proviso to Section 11A of the Act, will depend on the specific circumstances of each case. In the case of Jaishri Engineering Co. (P) Ltd. v. CCE, 1989 (40) E.L.T. 214 (S.C.), the Hon ble Supreme Court had observed that whether there was any fraud, collusion, wilful mis-statement or suppression of facts for the Department to justify claim of duty beyond the period of six months, was question of fact. The Supreme Court had further observed that the fact that the Department visited the factory of the appellants and they should have been aware of the production of the goods in question, were no reason for the appellants not to truly and properly describe those goods. It was further added that having come to the conclusion that there was deliberate suppression or wrong statement it follows automatically that the Tribunal was justified in upholding the imposition of penalty. In the facts and circumstances of the case, following observations of the Hon ble Supreme Court in para 14 of their judgment in the case of Madras Petro-Chem Ltd. v. CCE, Madras, 1999 (108) E.L.T. 611 (S.C.) are also relevant - 14. The proposition of law as laid down is not in di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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