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TMI Blog2004 (3) TMI 494X X X X Extracts X X X X X X X X Extracts X X X X ..... ods were all returned back to the supplier, who is a 100% EOU. The appellant's contention is that they do not have the facility for manufacture of shrink proof fabrics and in proof of their contention, they had produced a letter dated 18-6-2001 issued by the South India Textile Research Association (SITRA). At the request of the appellants, the officials of SITRA visited the factory and conduct the study. In an unequivocal terms, they have certified that appellants do not have facility to carry out shrink proof process on cotton fabrics. They have stated in the certificate that for the purpose of manufacture of shrink proof fabric, a stenter with four or five chambers are required. On examination of the zero-zero machine which is installed in the appellants' factory the report states that "appellants have not installed the stenter machine and hence there was no process of shrink proofing in terms of definition of "shrink proofing" appearing in the Notification No. 8/96-C.E., dated 23-7-96 amended from time to time". The notification granted the benefit of exemption to the cotton fabrics processed with the aid of zero-zero machine. However, the notification clearly indicated in Expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants during the process as revealed from the registers maintained by the appellants. It was contended that appellants do not have any facility to test the shrinkage and any shrinkage done through any other process than the stenter machine was of no consequence. Further, the shrinkage did not specify the percentage laid down in the said circular. It was also submitted that the Commissioner had himself noted in the order the details of the shrinkage but had over looked the fact that fabric also got elongated and there was shrinkage which was more than the laid down parameter. Therefore, the reliance on private registers is not as per law in terms of the rulings of the Tribunal rendered in the following cases :- (1) Ambika Chemicals v. CCE, Chennai, 2002 (148) E.L.T. 101 (Tri-Chennai) (2) M.M. Dyeing & Finishing v. CCE, Chandigarh, 2002 (139) E.L.T. 143 (3) Kashmir Vanaspati (P) Ltd. v. CCE, 1989 (39) E.L.T. 655 (4) CCE, Chennai v. Dhanavilas (Madras) Snuff Co., 2003 (153) E.L.T. 437 (5) & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner on one aspect of the matter in Para 117 which deals with subsequent four show cause notices is sustainable to the entire case. He submitted that the demands are also time-barred and unsustainable for not having taken into consideration various pleas raised by them with regard to the fact that there was no suppression in the matter and the department was fully aware of all the processes carried out by them. 5. Ld. Counsel submitted that the issue is fully covered in their favour in terms of the judgment rendered in the case of Omkar Textile Mills Pvt. Ltd. (supra) which has not been accepted by the Commissioner on the basis of instructions issued by the Board in the year 1964 which is not applicable to the period in question as the said guidelines/instructions had been withdrawn. He submitted that the Omkar Textile Mills Pvt. Ltd.'s case has been confirmed by the Apex Court [1994 (69) E.L.T. A195 (S.C.)] and the same is bound to be followed in the present case. He submitted that various statements given by the party are of no consequence as the shrinkage has to be in terms of definition given in the notification and the material should be recognized as shrink-proof materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e marketed as such. The department has not produced any evidence of test of marketability in the present case. It has not been shown that the item was marketed as shrink-proof material. Be that as it may, the circular of 1964 is no longer in existence in terms of subsequent withdrawal in the light of Circular No. 38/38/94-CX. 4, dated 27-5-94. The second ground on which the ld. Commissioner has proceeded is that the they had used mechanical and chemical processes by which they achieved the shrinkage parameters and the item can be considered as shrink-proof material. It is seen from Page 123 of the paper book which a test result certified by the department, the test result has been submitted by the Joint Director of Customs Laboratory, Custom House, Chennai to the Asstt. Commissioner of C. Ex., Coimbatore which clearly indicates the analysis results. The report clearly shows that there is expansion and shrinkage in the warp and weft which is more than 1.5% in the specific samples supplied. This evidence along with the evidence of SITRA shows that appellants had not installed the stenter machine which is a requirement for bringing into existence a shrink-proof cotton fabric in terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirm the demands. He has noted about the test reports and showed that fabric processed by the appellant was not a shrink-proof cotton fabric. He has also noted that the item was not marketed as shrink-proof material. He has dropped demands on subsequent four show cause notices issued after the first show cause notice dated 28-11-2000. He has noted that the later show cause notices rely only on the statement of customers. He has also noted that in all the statements, they requested the appellants to process the cotton fabric according to their requirement within the parameters laid down. However, during examination they had retracted their statements. He has noted that the department did not produce any evidence to show that the samples taken for analysis of composition of fabrics and percentage of residual shrinkage of processed fabric. He also noted that department also failed to prove that the fabric processed by the appellants is marked or marketed as 'shrink-proof fabric'. He has also noted that department has not proved by any record/evidence that the fabrics processed in their compressive shrinking machine has controlled the shrinkage to the extent to be called as 'shrink ..... 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