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TMI Blog2002 (1) TMI 751X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, they were issued a show cause notice on 4-3-93 alleging that the said Polished and Glazed Yarn was properly classifiable under Heading 56.07 and not under Heading 53.01. Accordingly, the notice proposed to confirm the differential demand of duty of Rs. 38,46,390.00 (Rupees thirty-eight lakh forty-six thousand three hundred ninety) in respect of Flax Yarn cleared by the appellant-company during the period from February, 1988 to September, 1992, along with the imposition of personal penalty. The show cause notice culminated into the impugned order passed by the Commissioner of Central Excise, Kolkata-IV vide which after rejecting the appellants' contention on the proper classification as also on the point of limitation, the adjudicatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has wrongly relied upon the HSN Explanatory Notes for the purposes of classifying the Yarn under Heading 56.07. 3. Shri Bagaria, learned Advocate, further submits that the provisions of Section XI and Chapter 53 of the Central Excise Tariff Act were broadly aligned with HSN for the first time by the Finance Act, 1995. In this connection, he refers to Paragraph 111 of the Budget Speech of the Finance Minister proposing to broadly align the Central Excise Tariff on textiles on the lines of the Harmonised System of Nomenclature, as the same will help reduce the classification dispute. He submits that new Section Notes in Section XI were introduced by the Finance Act, 1995, providing that Flax Yarn, polished or glazed, measuring 1286 deni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... February, 1988 to September, 1992, is clearly barred by limitation of six months inasmuch as the clearance from the appellants' factory took place in accordance with the approved Classification Lists; Monthly RT - 12 returns were filed by them and assessed by the proper officer. All the invoices relating to the clearances were being attached with the said RT - 12 returns. Audit Teams of the Central Excise Department had also visited the factory on several occasions and did not find any ambiguity in the classification and the Central Excise Authorities were fully aware about the nature of the Flax Yarn being polished and glazed variety. As such, he submits that there was no justification for invocation of the longer period and relied upon th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id of power; 5301.31 - Not containing or containing not more than one-sixth by weight of synthetic staple fibre calculated on the total fibre content; 5301.32 - Containing more than one-sixth by weight of synthetic staple fibre calculated on the total fibre content; 5301.90 - Other" 10. It is seen that there is no dispute about the fact that the goods manufactured by the appellant-company are nothing but glazed yarn. There is no Section Note or Chapter Note in Central Excise Tariff Act, 1985 to the effect that a particular decitex of flax yarn would be taken out of the category of the Flax Yarn and would be classifiable under Heading 56 as twine, cordage and rope and cable. The adjudicating authority has referred to the HSN E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oses of Heading Nos. 52.04, 54.01 and 55.08, the expression - "sewing thread" - means multiple (folded or cabled) yarn. The use of the expression - 'mean' - in the Section Note 5 shows that in the ordinary course, the sewing thread has to be treated as detailed in the sub-section of the said Section 5 and the meaning as given to the sewing thread in the said Section is the universal meaning and has to be applied to all the cases of classification dispute. However, in contrast, this expression used in Section 3A is - "are to be treated". This shows that in the ordinary course, Flax Yarn measuring 1429 decitex or more, remains Flax Yarn, but by way of artificial definition, they have to be treated as twine, cordage etc. As such, it is not a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decitex or more. As such, he has invoked the longer period of limitation by observing that the appellants got the Classification Lists approved by withholding deliberately, the material information with intention to evade the Central Excise duty. On the other hand, the appellants' contention is that inasmuch as all types of Flax Yarn were classified under Heading 53.01, there was no requirement to give the decitex of the yarn. We agree with the above contention of the appellants. If the proper officer was of the view that decitex of the yarn is the deciding factor for the purposes of the correct classification, there was nothing to stop him from seeking the said information or any other information from the appellants before approving the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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