TMI Blog1985 (4) TMI 285X X X X Extracts X X X X X X X X Extracts X X X X ..... Department s Representative. The hearing of the case was then proceeded with. 2. The facts of the case, in brief, are that Item 18A of the Central Excise Tariff read as under :- 18A Cotton yarn, all sorts. There was an Explanation below this item which read as under :- Explanation. - (1) `Cotton yarn shall include cotton twist and thread. (2) Cotton yarn, twist or thread, all sorts, whether sized or unsized, in all forms including skeins, hanks, cops, cones, bobbins, pirns, spools, reels, cheeses, balls or on warp beams shall be deemed to be included under this Item. (3) Explanation I, II and III under sub-item III of Item No. 18 shall, so far as may be, apply in relation to this Item as they apply in relation to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondents by the Assistant Collector and allowed their appeal. The Department is in appeal against this order of the Collector (Appeals). 3. The Department s plea is two-fold :- (1) `Cone is included specifically in Explanation (2) below Item 18A and hence it is a dutiable form of cotton yarn. (2) By virtue of the expanded definition of Section 2(f) (winding, reeling, etc. of cotton yarn included in the definition of `manufacture ), doubled yarn or multiple fold yarn was a different commodity from single yarn. Further, by virtue of Rules 9 and 49, as amended in 1982 with retrospective effect, internal removal of cones for manufacture of multiple fold yarn in hanks amounted to `removal of excisable goods and duty had to be paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al for manufacture of another commodity and hence the respondents are required to pay the duty at the time of removal of cones. We do not agree with the Department. As made clear in Explanation (2) below Item 18A, bobbins, cones and hanks are all various `forms of the same commodity, namely, cotton yarn. It is further made clear in Explanation II below Item 18-III, made applicable to Item 18A by virtue of Explanation (3) thereunder, that cotton yarn includes both single yarn as well as multiple fold yarn; else, there would be no point in prescribing how the count of multiple fold yarn shall be determined for the purpose of Tariff Item 18 as well as 18A. In fact, single yarn and multiple fold yarn or doubled yarn are only two different va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y us, such repeated taxation at intermediary stage would make the total exemption given to hank yarn meaningless and render that part of the exemption notification nugatory. It is settled law that an interpretation which makes any part of the statutory provision nugatory ought to be eschewed. The object of incorporating an extended definition of `manufacture in Section 2(f) of the Act was to collect the duty if hank yarn was cleared after availing full exemption from duty and was later converted into some other form of cotton yarn. This is clearly evident from clause (iii) of the Proviso to Notification No. 131/77-C.E., dated 18-6-1977. 6. In the light of our above discussions, we are unable to find any fault with the impugned order of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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