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TMI Blog2011 (3) TMI 875X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Excise duty falling under Chapter Heading 5406.29 of Central Excise Tariff Act, 1985 as being covered under any other process . By virtue of exemption Notification No.03/2001-CE, dt.1.3.01 (S.No.103) pleated fabrics manufactured out of processed fabrics on which the appropriate duty of Excise has already been paid stood exempted from payment of duty. It appeared in the instant case that no duty had been paid on grey fabrics on which pleating had been done. Therefore, duty was payable. The show cause notice dt.16.6.06 was issued demanding Central Excise duty under proviso to Section 11A(1) of Central Excise Act, 1944 along with interest under Section 11AB of the Act, ibid, proposing penalty under Rule 25 of Central Excise Rules, 2002 and Section 11AC of Central Excise Act, 1944, proposing for confiscation of finished goods under Rule 25 of Central Excise Rules, 2001/2002, and proposing for penalty upon Shri Sunil D. Balajiwala, Partner of the unit under Rule 26 of Central Excise Rules, 2002). 2. The matter was adjudicated after issue of show cause notice and on appeal filed by the appellant, this Tribunal vide Order No.A/2512-2513/WZB/AHD/07, dt.28.8.07/28.9.07, remande ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... porary in nature, under the said Section 37B order, it is to be treated as a manufacturing activity. Nowhere, in the entire show cause notice is there a single murmur of what has been now set out by the respondent in Paragraph 7 of his impugned order for the very first time. b) The appellants submitted that it was not open to the Commissioner to say that he would not consider the report of Dr. R.S. Gandhi, when the Tribunal had directed him to do so. It was also submitted that Dr. Gandhi s report was obtained by the appellant only to demonstrate that the pieces retained by them in respect of temporary pleating to prove their point that the pleating was temporary. The burden of proof to show that the pleating process was not temporary was on the Revenue. c) Learned Advocate also contested the observations of the Commissioner that the office of MANTRA expressed their inability to assist in absence of sample. d) The order of Board issued under Section 37B of Central Excise Act, 1944 cannot override the judgment of Hon'ble Supreme Court and therefore the reliance on the same is not valid. e) It was also submitted that the learned adjudicating authority s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en in the said leaflet/brochure issued by the manufacturer of the machine M/s Cheen Lien Machinery Corpn., No.82, Chun Ting St., Shu Lin, Taipei, Hsion, Taiwan, it is observed that considerable electrical energy (varying from 6 kw/1 HP to 13 kw/5 HP is required to run the machine. From this fact, coupled with the unit s submission that use of papers was to prevent the fabrics from getting burnt, it is obvious that heat setting is being carried out during the process of pleating. Therefore, I reject the contentions raised by the unit that they do not use heat setting during the process of pleating. 7. The appellants had relied upon the decision of Hon'ble Supreme Court in case of M/s Siddeshwari Cotton Mills (P) Ltd. Vs. UOI as reported in 1989 (39) ELT 498 (SC) and in the case of M/s Ronuk Manufacturing Co. Vs. CCE Mumbaias reported in 2004 (174) ELT 33 (Tri-Mumbai). The Commissioner in the impugned order has not taken these decisions into account on the ground that both these decisions related to the period prior to the CBE&C circular issued under Section 37B dt.21.1.98. In fact, the decision of the Tribunal in case of M/s Ronuk Manufacturing Co. took note of the observati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; 5. The processes of? embossing and pleating are commercially well known processes which are carried out for specific purposes to give the fabrics the desired effects. These processes add substantially to the visual appeal, feel, value and marketability of the fabrics and result in making the embossed or pleated fabric commercially distinct from the base fabrics. The effect so produced on the base fabrics by embossing or pleating cannot be considered as superficial. The embossing or pleating on the fabric is not known to disappear on its own i.e. within a reasonable period of time of normal use, say 2-3 years, even after ironing or dry-cleaning. 6. The Board has also taken note of the fact that tentering and heat setting are processes which may not bring lasting changes in man-made fabrics and has been included in the definition of manufacture under Chapter Notes subsequent to the period which was involved in the case of Siddheshwari Cotton Mills decided by the Supreme Court under old Tariff Item 19. Even sometimes the processes like dyeing and printing may not last for ever, but they are treated as processes amounting to manufacture. 7. In these circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act that during of visit of the Chemist, while the chemist had examined all aspects, the fact that chemical examiner had not given the details of the technical literature on which he depended upon to give his opinion, goes to show that reliance on the opinion of chemist alone may not be sufficient. However, in view of the fact that the department has not filed an appeal against the decision of the Tribunal, wherein considering the view of chemist that chemical treatment and resin finishing are necessary to give pleated fibres permanently and in the remand order, a direction was given to examine this aspect, the only option available to the Commissioner was to examine whether resin finishing and chemical treatment was given by the appellant or not and if no such treatment was given, obviously the conclusion has to be in favour of the appellant. Since this aspect has attained finality, it would not be appropriate to go into the issue as to whether in the absence of chemical treatment and resin finishing, pleating would be temporary or permanent. In fact, the case for the Revenue fails on this ground alone but it would be necessary to consider other aspects also. 12. Further, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o ascertain the value of the grey fabrics and for this purpose the department needed the principals for whom the job work was done. When we look at it from this angle, the observation of the Commissioner that the unit could not have sent the samples to Dr.R.S. Gandhi when the machine has been sold in past, is only an assumption and no specific question has been asked. There is no evidence to show that even in the remand process, the Commissioner had asked the appellant as to whether the sample was available for getting it tested. The conclusion that the appellant had returned the goods received from the principal manufacturer in to-to after pleating is also not coming out from the facts of the case to support the conclusion drawn by the Commissioner. The Commissioner has observed that the department approached MANTRA. They said that they cannot give their opinion in the absence of any sample and in such a situation, how they gave opinion to the appellant, is the question. Further, first of all, the report submitted by the appellant is not from MANTRA but from ex-Director in his personal capacity. He clearly refers to the sample pieces of pleated synthetic thermoplastic nylon polyes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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