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TMI Blog1983 (2) TMI 292X X X X Extracts X X X X X X X X Extracts X X X X ..... clared the terene contents as 28% at the grey stage and 31.8% at the processed stage. The appellants sought classification of the fabric under Item No. 19-I(2) of the Central Excise Tariff Schedule (C.E.T.) which was allowed by the Assistant Collector of Central Excise, Bombay. Simultaneously, samples were drawn by the Excise authorities for chemical test to ascertain the composition of the fabric. A Show Cause Notice-cum-Demand dated 8-8-1975 was issued by the Range Superintendent for a sum of ₹ 10, 507.16 representing the difference in duty between that leviable under C.E.T. Item No. 19-I(la) and that paid under Item No. 19-I(2). The notice covered the clearances effected during the period from 14-5-1975 to 9-6-1975. On receipt of the test report from the Deputy Chief Chemist to the effect that the terene (a non-cellulosic fibre) content of the processed fabrics amounted to 32.1%, the Superintendent issued a second Show Cause Notice-cum-Demand dated 18-12-1976 for the period from 3-1-1976 to 3-2-1976. The appellants submitted in reply to the two notices that samples should have been drawn at the grey fabric stage only to ascertain the terene percentage. They also submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Only the Central Board of Excise & Customs action under Section 35-A of the Central Excises & Salt Act could have reviewed the decision taken by the Assistant Collector in approving the classification list, the price lists and RT 12 returns. The Assistant Collector could not have reviewed his own orders. 4. Dr P.V. Jois, Secretary (Law), Mill Owners' Association Bombay, appearing on behalf to the appellants stated that the grey fabric was subjected to the processes of scouring, bleaching, dyeing and printing. The Brosso process of printing adopted by the appellants resulted in the liberation of acidic matter which burnt out part of the cotton fibre present in the fabric and that this explained the fact that the fabric, after processing, had a terene content over 30%. The manufacture of the fabric was complete when the fabric as woven came off the loom, i.e. at the grey stage. The terene content at the grey stage was less than 30%. Therefore, the proper classification of the fabric was under Item 19-1(2) as cotton fabrics - "others" - and not under item 19-1(1A) as "Cotton fabrics......... containing 30% or more by weight of fibre, or yarn, or both, of non-cellulosic origin" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further submitted that the value for the purpose of levy of duty also had to be determined with reference to the stage of removal or clearance of the fabric from the factory. Applying this criterion, the processed fabric correctly fell for classification under Item No. 19-I(1 A) CET. With regard to the appellants' submission on the applicability of Rules 10, and 10A Shri Tayal drew the attention of the Bench to the judgment of the Delhi High Court in the case of Bawa Potteries v. Union of India (1981 E.L.T. 114 (Delhi) and submitted that Rule 10 permitted a review of the order of assessment. 6. Replying to Shri Tayal's submissions, Dr. Jois submitted that a quasi-judicial decision could not be reviewed by a Show Cause Notice. He referred in this context to the judgment of the Gujarat High Court in the case of Bhor Industries Ltd., v. Union of India 1980 E.L.T. 752 (Guj.). He also submitted that with the retrospective amendment of Rules 9 and 49, the position has been made clear namely that excisable goods removed within the factory of production for further manufacture had to pay duty at the stage of such removal. In the appellants' case this meant that the fabric attracted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the average count of yarn is 26s or more but is less than 41s. (d) Cotton fabrics, Medium-B - that is to say, fabrics in which the average count of yarn is 17s or more but is less than 26s. (e) Cotton fabrics Coarse-that is to say, fabrics in which the average count of yarn in less than 17s. (f) Cotton fabrics not otherwise specified. 10. From the percentage composition data noted in para 3, it is clear that though the grey fabric did not fall under Item 19-I(1A) because of its non-cellulosic fibre content being less than 30% the processed fabric correctly fell within the purview of Item 19-I(1 A) since the non-cellulosic fibre content in it exceeded 30% as a result of part of the cotton content having been lost as a result of the processing. The appellants, however, strenuously contend that it is the grey stage composition that would determine the duty liability of the fabric. In support of this contention, they rely upon the judgment of the Gujarat High Court in Vijay Textiles v. Union of India 1979 E.L.T. (J. 181), which lays down that the "manufacture" of fabric is over when the fabric is woven. The weaving of the fabric is over when the fabric comes off the loom in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t acceptable for the reason that the said Act had the effect of making processed fabrics as a distinct entry in the excise tariff under the relevant items in addition to unprocessed fabric. The appellants' contention that reclassification of the processed fabric under Item 19-I(IA) would make them fall foul of the Textile Commissioner's stamping regulations lacks substance since the stamping regulations which may have their own rationale cannot be the determinant criteria for classification of the goods for levy of excise duty under the Central Excises & Salt Act. We, therefore, hold that though the grey fabrics in the instant case may have fallen for classification under item 19-I(2), after the fabrics were subjected to processing which resulted in change in the relative percentages of the constituent fibres or yarn, the non-cellulosic fibre content going upto a figure above 30%, the processed fabrics were correctly classified under Item 19-I(1A)of the CET since we have held that the processed fabrics did not fail under item 19-I(2), the question of applicability of Notification No. 88/69 dated 1-3-1969 would not arise. 11. The next question arising for decision is whether ..... X X X X Extracts X X X X X X X X Extracts X X X X
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