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TMI Blog1975 (4) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... s Tax Act, 1948 (for short called the Act): "Whether the article 'carpet woollen yam' is covered by the term 'yarn' mentioned in item No. 4 of Notification No. ST-907/X dated 31st March, 1956, and item No. 33 of Notification No. ST-1365/X dated 1st April, 1960, taxable at 6 pies and 3 pies per cent respectively or a kind of woollen goods as mentioned at item No. 46 taxable at one anna per rupee according to Notification No. ST-905/X dated 31st March, 1956, or whether it is an unclassified item taxable at 2 per cent." 2. M/s. Sarin Textile Mills, Agra, is a manufacturer of and dealer in "woollen carpet yarn", popularly known as "kati". The relevant assessment years are 1959-60 and 1961-62. The only dispute is, whether such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Notification No. ST-905/X as "woollen goods". In the result, the High Court answered the questions against the revenue. Hence these appeals. 8. Mr. Rana, the learned counsel for the appellant, contends that the term "Yarn" used in the aforesaid notifications should be interpreted in the sense in which it is understood by persons engaged in the trade. Stress has been placed on the fact that in English, even the assessee has been describing the article in question as "woollen carpet yarn". Such kati, it is pointed out, is used in the manufacture of carpets by a process of "knotting", which in ordinary parlance is described as "weaving". According to Mr. Rana, the distinction drawn by the High Court between "weaving" and "knot- ting", be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver of certain commodities mentioned therein should be taxed at a single point, at the point of sale by the manufacturer or the importer, at the rate of six pies per rupee. The relevant entry of this notification is No. 4, which reads: "Yarn of all kinds, including unspun fibre used in weaving, other than handspun yarn but excluding cotton yarn in cops and cones." (emphasis added.) (ii) Notification No. ST-1365/X-990-1956 dated 1st April, 1960.- It is also a notification under section 3-A of the Act and the relevant entry is at item No. 33, which reads: "Yam of all kinds including unspun fibre used in weaving other than handspun yarn but excluding cotton yarn." (emphasis added.) (iii) Notification No. ST-905/X dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This phrase which, in one sense, extends the connotation of "yarn" by including in it unspun fibre, pinpoints and highlights, on the other hand, the usability of such unspun fibre in weaving as a determinative circumstance. 15. The question thus narrows down into the issue: Is woollen carpet kati -which is admittedly unspun fibre-"used in weaving" within the contemplation of these notifications? Again, "weaving" has not been defined in these notifications or the other statutory provisions. We have therefore to fall back upon its ordinary dictionary meaning. In that sense, "weaving" implies the process of forming thread into fabric by interlacing. "The most important method by which wool products are produced is weaving, the interlacing at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itself. In all methods of weaving before a length of weft is inserted in the warp, the warp is separated, over a short length extending from the cloth already formed, into two sheets. The process is called shedding. The sequence of primary operations in one weaving cycle is thus shedding, picking and beating in. (Encyclopaedia Britannica, Vol. 23, page 342.) 17. "Weaving is differentiated from both warp and weft, knitting from braiding, and from net-making, in that these processes all make use of only one set of elements. In addition, there are geometrical differences." (Encyclopaedia ibid.) 18. The ground having been cleared, it is to be seen whether the process by which woollen carpet kati is used in the preparation of carpets, can p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollen carpet kati is only raw material from which "woollen goods" are prepared. In this connection, it is to be noted that yarn used in weaving the warp and weft of carpets, or woollen fibre used in weaving has been made taxable at a far lower rate than "woollen goods" under the notifications. It could never be the intention that a mere component or raw material used in the manufacture of woollen goods by a manual process, not being a process of weaving, should be taxed at a far higher rate, by treating the same as a finished "woollen goods". 23. For the foregoing reasons, we are of the opinion that "woollen carpet kati" is neither "yarn" nor "woollen goods" falling under the aforesaid notifications issued under section 3-A. It is an uncla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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