9911796707
TMI Blog2005 (7) TMI 650X X X X Extracts X X X X X X X X Extracts X X X X ..... the extended period of limitation alleging that there was mis-declaration and also proposed to invoke the penal provisions apart from proposing to deny the whole of the credit and not only the difference between 50% and 60% and after considering that the Tribunal vide Order No. 334/99, dated 4-2-99. Had remitted the proceeding initiated vide SCN 6-3-96 to the Assistant Commissioner after setting aside the orders of the lower authorities, leaving the question of manufacture open. Considering that the said question was first to be determined and only thereafter duty liability, the quantum of credit, benefit of notification, etc., would arise. It was held that there is no manufacture, and then nothing further would survive in the matters. He disposed off the proceedings, initiated by the Assistant Commissioner by the Show Cause Notice dated 6-3-96 as also the Show Cause Notice No. V/52/15/91/98-CX, Adjn dated 18-6-98 by the order impugned before us, after holding as follows :- "Since the question of manufacture is to be decided first before proceeding further in the matter and the question of manufacture now being open and in view of the fact that the Tribunal has found that the fail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eversible. It is also not disputed that there is shrinkage as per international standards. Commissioner himself observes (para 7.l page 7) that shrinking denotes verity of processes for shrinking fabrics to avoid excessive shrinkage in the garments and that it is known as preshrinking. Thus Commissioner accepts preshrinking as a process, which is done by the manufacturer for shrinking fabrics to avoid excessive shrinkage. It is also a fact that such pre-shrinked fabric is cleared as such. Commissioner at para 18 of the order also accepts that the controlled compressive shrinkage carried out by M/s. K.G. Denim is an irreversible one which means whatever percentage of shrinkage imparted to the fabric is irreversible. Inspite of this fact Commissioner concludes that Controlled Compressive shrinkage (CCS) does not result in a lasting change to the fabric as it can undergo further shrinkage, which does not appear to be correct. 2. According to the Supreme Court judgment, what is required is whether the process imparts any lasting change to the fabric. In the present case, the controlled compressive shrinkage imparts certain percentage of shrinkage (as decided by the manufacturer) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has in para 6.2 of the Order-in-Original interpreted the above said affidavit of Shri Veeraraghavan to mean that compressive shrinkage amounts to lasting change and they (Hon'ble CEGAT) cannot subscribe to this conclusion on the basis of the said evidence, particularly in the light of the rest report of the Office of the Deputy Chief Chemist, Madras. In the test report of the Deputy Chief Chemist it has only been stated that the FMDM solution applied on the denim fabric will not have any effect on the fabric other than wetting/damping of the fabric and has not given any opinion regarding CCS. But in the affidavit of Shri Veeraraghavan the shrinkage (Controlled Compressive Shrinkage) achieved by the process performed in the Monforts machine has concluded as lasting. Since the Deputy Chief Chemist and Shri Veeraraghavan have reported in respect of different processes, the observation of the Hon'ble CEGAT that they cannot subscribe to the opinion of the Assistant Commissioner that compressive shrinkage amounts to lasting change particularly in the light of the test report of the Deputy Chief Chemist does not appear to be correct. 6. The Process carried out by M/s. K.G. Denim, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on as it is hold firmly in contact with the blanket by the drum of a modified Palmer machine". 9. Commissioner has also held that "any prior stages of the processes" enumerated in the chapter note can not be termed as any other processes. This hypothesis is not pertinent to the present case since the controlled compressive shrinkage process is not carried out as an intermediate process by K.G. Denim before achieving shrink proofing and since this CCS process is specific for Denim fabrics and the same is as per International Standards. Further as per Supreme Court's judgment, what is required is that there should be process giving lasting character, and it does not prescribed any condition as made out to be. 10. Commissioner has also observed that since cotton fabric shrinks, when it comes in contact with water, every such shrinkage cannot be termed as resulting in manufacture. This observation of the Commissioner is also not pertinent to the present case since the CCS is not achieved by K.G. Denim by wetting the fabric in water and it is obtained by the different process as brought out earlier. 11. Commissioner has also observed that "shrinkage" or any process whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Sixth edition revised) at Pages 248 - 253 etc available before him. He ought to have discussed and connected all the evidences available before him in this de novo adjudication. 14. The Government of India, vide its Notification 4/96, dated 4-3-96, has inserted the Explanation II to Notification 40/95, dated 16-3-95 and thereby has clarified that the exemption under the later Notification will not apply to the products commonly known as 'Denim Fabrics'. In view of the above insertion, KGD are not eligible for the benefit of the Notification 40/95 from the date of issue dated 16-3-95 and hence it is not necessary to disallow the benefit on the grounds that KGD has carried out any other process which is not specified in the Notification in addition to the specified processes, as provided for in the Notification. Further, denim fabrics are not eligible for exemption under the said Notification with effect from 16.3.95 even if subjected to the process specified in the Notification'. Hence, it appears that the decision of the Commissioner on question of manufacture in the de novo proceedings will have no impact in allowing/disallowing the benefit of the notification to KGD with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp;The Commissioner, having observed in the subject order that since there is no manufacture involved in what the company does on its Monforts machine, the SCNs mentioned in para 10 and 12 would not survive, has proceeded to decide the issue of deemed credit for the purpose of completion of records. The Commissioner, based on the opinion of experts, held that in the case of shuttleless looms, the yarn used in the edges of the fabric which locks the weft is the selvedge and in this case the monofilament yarns used at both the edges is the selvedge and all other yarns are to be taken as the body of the fabric and hence, on this factual aspect itself the controversy raised in the notice is to be dropped as unsustainable. 18. The case of the dept. is whether the monofilament yarn and polyester yarn used by KGD in the selvedges of the denim fabric should be considered for allowing higher deemed credit under clause (b) of the Notification 29/96 C.E. (N.T.), dated 3-9-96. The para 2 (II) of the Notification reads as follows: "in case of a manufacturer other than a composite mill, shall be equivalent to the amount calculated at the rate of - (a) 50 per cent of the duty of excise le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Order-in-Original may please be determined; 1. Whether after taking into consideration the facts stated above, the order of the Commissioner holding that the alleged process does not amount to manufacture and thereby dropping the proceedings initiated in the SCNs dated 6-3-96 and 22-6-98 is legally correct and proper. 2. Whether by an order passed under Section 35C, the Tribunal should modify/set aside the order passed by the Commissioner or pass such other order as may be deemed fit. 3. After hearing both sides and considering the material on record, it is found - (A) The show cause notices, set aside by the impugned order fall in three categories, as below- (i) Notices on ineligibility to Deemed Credit viz. 29-7-98, 7-9-98, 27-11-98, 13-1-99, 16-3-99 and 31-5-99 answerable to Commissioner. (ii) Notice dated 18-6-98 on alleged CLANDESTINE CLEARANCE of fabrics answerable to Commissioner. (iii) Notice dated 6-3-96 on the proposal to finalise the Provisional Assessments answerable to Assistant Commissioner as remanded by Tribunal for DENOVO PROCEEDINGS. Since there is no notice dated 22-6-98 as mentioned in the appeal by Revenue and it was submitted that reference t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these materials were not used in making the fabric. The argument of the counsel that in interpreting the provisions of the notification issued under Rule 57A (a Modvat provision), a view contrary to the basic provision cannot be canvassed is, in my opinion, well taken. 29. In any case, the need to go into this aspect may not arise if the matter could be resolved on the factual aspect itself. The opinion obtained by the Department is without bringing to notice the factual position that the fabrics are woven on shuttleless looms and not on shuttle looms. Since the difference in identifying the selvedges between the fabrics woven on 'shuttleless' and 'shuttle looms' has not been noticed, this aspect was not considered in taking the opinion. The definition given in the Textile Terms and Definition clearly brings out this difference. 30. The experts to whom the company has made reference have clearly opined that in the case of shuttleless looms, the yarn used in the edges of the fabric which locks the weft is the selvedge and in this case the monofilament yarns used in the fabric between these two monofilament yarns are to be taken as the body of the fabric. This view is bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery said para 4.16 i.e. Regarding the Commissioner ought to have considered and decided the SCN's separately on merits and not on his finding on the decision in the DE NOVO proceedings is considered. It is found that the Boards order under Section 35E(1) of the Central Excise Act, 1944 does not question or refer, the Commissioners conduct in deciding the DE NOVO PROCEEDINGS vide SCN dated 6-3-96 answerable to an Assistant Commissioner as a point to be determined by this Tribunal. In fact, in para 2.7 of the order, the Board has recorded the submission made by the Respondents and recorded by the Commissioner of CBEC instructions/orders nos. 362/78/97-CX, dated 9-12-97 clarifying that in order to obviate conflicting decisions, when more than one adjudicating authority has jurisdiction in the same Commissionerate, then all such cases can be adjudicated by an officer competent to decide the case where the duty involved is of the highest amount; Commissioner has followed these instructions. In the 35E(1) order, Board has not challenged that conduct as it was as per Boards order. In this view, there is no force in the plea against a common order being passed. If the Commissioner's findin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... WILL WEAVE, at this stage, are subject matter of excise levy in this case. (F) Before proceeding further in the quest to determine the exigibility of the entity in view of court's decisions, certain definitions, of terms understood by people dealing in such goods and the provisions of Central Excise Tariff Act, 1985 are required to be noted. They are - (i) From Fairchild's Dictionary of Textiles, 6th Edition, 1988 as :- Fabric : A cloth is that Woven, Knitted, Braided, Netted, Felted or Pleated with any Textile fibre, or is a Bonded Web. Derived from the Latin term Fabrica, which means fabric or workshop. Finised Goods : Converted Fabrics. Cloths that, after having been constructed, have been passed through all processes required to make the goods suitable for sale to the ultimate consumer. Finishes, Basic or Regular : All processes required to convert Gray (or Greige) goods into merchandise saleable to the consumer of ultimate processor. Basic finishes are mechanical and/or chemical. Finishes that appeal to the eye include Shedding, Singeing, Brushing, Beetling, Mercerization, Tentering, Calendering, Moireeing, Pressing, Embossing, Crimping, Glazing, Polishing, I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ige, the French word for Natural, from which it was corrupted. While Greige is used to some degree for silk and man-made fabrics, there is a tendency toward the use of the word "gray" instead, particularly in the case of silk. Synonym: loom state. Jean : A Warp faced, three-harness cotton Twill generally woven of carded yarns in weights lighter than drills; it has more threads per inch and a finer twill line than drills. The Twill runs from lower right to upper left, and some versions are made with shadow stripes accomplished by alternating groups of reverse and regular (s and z) yarns in the warp. Jeans are occasionally made with Cotton Warp and low-grade wool or shoddy filling. The fabric may be used in the Gray. Dyed solid colors or printed and is sometimes mercerized. Uses: Sportswear, Work clothes, Corsets, 'Doctors and Nurses' uniforms, Children's play clothes, Decorative fabrics, Backing of coated fabrics and some industrial purposes. Sometimes used Interchangeably for "Denim", for example "Blue Jeans". 1. A British term for a filling faced one up, two down Twill cotton used for linings. (Emphasis supplied) Twills : A broad term for fabric made with a Twill Weave. Speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss or any two or more of these processes without the aid of power or steam. Under Chapter 52 for the year 1995-96 (3) In relation to products of heading Nos. 52.07, 52.08 and 52.09, bleaching, mercerizing, dyeing, printing, water-proofing, shrink-proofing, organdie processing or any other process or any one or more of these processes shall amount to 'manufacture'. Heading No. Sub-heading No. Description of goods 52.07 Woven fabrics of cotton, containing 85% or more by weight of cotton 5207.10 -No subjected to any process -Subjected to the process of bleaching, mercerizing, dyeing, printing, water-proofing, shrink-proofing, organdie processing or any other process or any one or more of these processes: 5207.21 ▪ Bleached woven fabrics 5207.22 ▪ Dyed woven fabrics 5207.23 ▪ Printed woven fabrics 5207.29 ▪ Other woven fabrics Under Chapter 52 for the year 1996-97 (3) In relation to products of heading Nos. 52.07, 52.08 and 52.09, bleaching, mercerizing, dyeing, printing, water-proofing, shrink-proofing, organdie processing or any other process or any one or more of these processes shall amount to 'manufacture'. Heading No. Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, this aspect becomes academic". Thereafter, it held that processes of bleaching, dying, sizing, Shrink proofing carried in respect of cotton or man-made 'gray fabric' would amount to manufacture for the purposes of Section 2(f) of the Central Excise Act provided what emerges after a process or processes is commercially different commodity. The law, therefore, is, if GRAY FABRICS remain GRAY FABRICS, after conduct of an operation/activity on them, no 'manufacture' would take place in such cases to attract fresh levy. (i) In the case of Empire India Ltd., 1985 (20) E.L.T. 179 (S.C.), the full Bench of Apex Court held that "38. In that view of the matter etymologically the word "manufacture" properly construed would doubtless cover the transformation. In support of the question whether actually there is manufacture or not various documents were attempted to be utilised at the hearing of the application before us. Most of these pieces of evidence cannot be admitted at this stage but indisputably in the Indian Standard Glossary of terms which deals with various expressions. 'Bleached Fabric' has been defined as a fabric which has undergone bleaching treatment and is treated by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Judicial Committee held that the respondents before them were 'producers of coal'. If that aspect of the matter is kept in mind then expenditure of human skill and material have been used in the processing and it may not be that the raw material was first transformed but over the transformed material, further transformation was done by the human labour and skill making this fit for human consumption". Therefore, transformation of the 'Gray Fabric' into a 'new commercial commodity' was sine qua non to bring excise levy. (ii) In the case of Kores India Ltd., [1982 (10) E.L.T. 253] it was held by a Division Bench of the Bombay High Court that the test of different commodity emerging from the one used as the base material is satisfied with respect to commercial understanding. If the new commodity emerging is different goods then manufacture would take place. This test has been approved and applied by the Supreme Court in the case of Laminated Packaging Ltd., [1990 (49) E.L.T. 326 SC] wherein Para-6 they have held as follows: "6. The further contention urged on behalf of the appellant that the goods belong to the same entry is also not relevant because even if the goods bel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raded. The voluminous evidence goes to establish that the 'manufacture' was not complete, without these operations and all cloth, after the loom stage were required to and went through MONFORT MACHINES. If that is the case, and in absence of any material that JEAN DENIM TWILL FABRICS after weaving or and Singing or and beating or and dusting were marketable per se the only conclusion that can be drawn is, that the cloth in this case, which are marketed or marketable as 'woven fabrics' which undergo the operations/activities in the MONFORT MACHINES. Marketability prior to that stage is not established and those goods prior to that stage, being not complete inasmuch as process incidental or ancillary are required to be undergone to render them marketable, could not be considered as exigible, as held in catena of decisions of the Apex Court. (I) Reading the definitions of JEAN, DENIM and TWILLS from the FAIR CHILDS TEXTILE DICTIONARY, as extracted and emphasised herein above, indicates that said cloth is used for manufacture of garments is in GRAY STATE or COARSE STATE and not known required to be used, in processed state. The Respondents were pleading that the bleaching, dyeing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase also, that Revenue is contending that the process is not shrink-proofing but being analogous to that the same, thus would be covered by the chapter note. It is found the issue herein is not whether a process is covered or not, but the issue is what is the result of such a process. The Apex Court in the case of Indian Aluminium Casts Ltd. [1985 (21) E.L.T. 3 (S.C.)] as regards a process being determinative of the Classification of an exigible entity is considered - "13. To sum up the true position, the process of manufacture of a product and the end use to which it is put, cannot necessarily be determinative of the classification of that product under a fiscal schedule like the Central Excise Tariff. What is more important is whether the broad description of the article fits in with the expressions used in Tariff". and thereafter held that Aluminium Rods when made by Peprozi process, a technological innovation, remain Aluminium Rods, as understood by people dealing in them and be classified as such. In the present case, there is no material to indicate, that cloth, after the loom stage, has changed its status from 'Coarse Gray' to 'Processed Cloth' in the minds of the people d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perations including dampening operation conducted by these machines, on very same fabrics, have been held to be not rendering the goods dutiable. It was submitted that the objective of the MONFORT MACHINES was to give DIMENSIONAL STABILITY TO THE FABRIC to conform to the desired grammage on basis of which it was traded/sold to Garment Manufacture who would further subject it to process of bleaching, shrinking, dyeing, shot bleastering etc. to give the commodity an identity of its own. (iii) The Commissioner in his order, after recording the submissions of both sides and considering the decision of the Apex Court in the case 1987 (39) E.L.T. 498 (S.C.) and 1989 (40) E.L.T. 218 (S.C.) the test reports, opinion of various experts, concluded that it is nobody's case that 'Shrink Proofing' has been done or achieved by the process of MONFORT MACHINES, he concluded, shrinkage has taken place, but that it is not ultimate, it only resulted in fabrics, at a stage of processing not culminating in result of Shrink Proofing. Thus it did not amount to 'manufacture'. Thereafter, he found in para 16 & 17 of the impugned order as - "16. When the ultimate result of the process of shrink ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to original stage is not the test of irreversibility but the question is whether the processes undertaken have achieved the ultimate irreversible result like shrinkproofing. I quote here from the opinion of Prof. H.T. Deo who had this to say "dyeing, printing, bleaching, shrinkproofing, etc. are finishing processes". Once these processes are carried out on the textile item, they are not undertaken again on the same item/fabric. In other words, semi-bleached fabric, for example, is not considered as a bleached fabric, as it is to undergo further bleaching, and then only, the lasting character of bleached fabric is imparted to the same. The stage of semi-bleaching is, therefore, not a lasting character, as the fabric would be further subjected to final full bleaching, when it would get a lasting character. Similarly, whenever a fabric is subjected to any wetting or wetting processes, it undergoes some shrinkage. That shrinkage is taking place over and over again at various degrees. However, the process of shrinkproofing is undertaken on garments before they go to the customers and ensures that there will be no shrinkage on laundering. Shrinkproofing, therefore, gives a lasting cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ric would undergo further shrinkage, the shrinkage obtained is not a lasting one. To give an analogy, a gray fabric can be dyed to get a light shade or dark shade of a particular colour. Since the light shaded fabric can be dyed to get a dark shade, it can not be said that the light shaded fabric is not dyed or that the light shaded colour is not a lasting one. Similarly, the manufacturer in this case can choose either to introduce partial shrinkage or 100% shrinkage depending on his requirement". (underlining supplied) especially the analogy given therein (underlined herein above), is considered. Since it was subject matter of oral submissions. The finding of the Commissioner, that every stage of 'shrink proofing' could not be covered by the Chapter Note, cannot be found fault with on this analogy. Since, if a light blue shade is the targeted process, it would result in the cloth being subjected to the process of light blue Dyeing; but if the target was Navy blue or dark blue or a darker shade, to be achieved, then light blue stage, if and when reached during the objective of achieving Navy Blue, dark blue or darker shade of blue, as targeted, could be only an intermediate stage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a FUNCTIONAL TYPE OF FINISHING, imparted to facilitate care to the Fabric after removed from looms, it results in reduction of length and width of material giving certain desired qualities. Nowhere have these definitions explain the effect to be lasting, except in case of SHRINK PROOFING, where further shrinkage will not result. The literature also explains that in heavy cotton fabrics, the price and quality is determined on grammage, the higher the grammage, i.e. weight of fabric per square meter, the denser would be the warp and weft threads. To achieve the desired woven fabric of a particular grammage not only a loom will be required but it could be completed and achieved only after shrinkage operations. Since that will bring the wrap and weft yarn more nearer than the loom can and will impart dimensional stability over width and length. This goes to indicate that these operations are 'finishing' operations on the woven fabric and not 'processes' that result in a commercially different entity. Therefore, except for 'pre-shrinking', which results in no or zero tolerance to further shrinkage and is specifically mentioned in the Chapter Note to Chapter 52, all shrinkage processes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... novo proceedings will have no impact in allowing/disallowing the benefit of the notification to KGD with effect from 16-3-95. Further, it appears that the decision of the Commissioner in the de novo proceedings that the process carried out by KGD on Monforts machine does not amount to manufacture, can only extnd the benefit of exemption under notification 253/82 dated 8-11-92 to KGD for the period upto 16-3-95 since the Explanation inserted vide its amendment No. 4/96 to, dated 4-3-96 Notification 40/95 will hold good from 16-3-95 onwards as amendment has to be construed as clarificatory in nature". (Emphasis supplied) From the underlined portion above, Board concurs with the proposition that "the process carried out by KGD on Monforts Machine does not amount to manufacture". Board agrees to extend the benefit of exemption under notification 253/82 dated 8-11-92 to KGD for the period upto 16-3-95 and requires only to apply the Amendment No. 4/96, dated 4-3-96 which inserts the clause of denial of benefit of Notification No. 40/95, dated 16-3-95 to Denim Fabrics as retrospective. "The learned Advocate for the Respondents relies on the catena of decisions which go to establish that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion is whether the matter can be referred to the Commissioner (Appeals) to deal with the materials placed by the appellants and also to answer the points dealt with by the Assistant Commissioner. We would have been inclined to send the matter to the Commissioner (Appeals). However, we find that the Assistant Commissioner in the order-in-Original has not properly come to grasp with the allegations made by the Revenue and has not analysed the effect of the evidences placed by the assessee. 15. Therefore, we are of the considered opinion that the matter has to go to the Assistant Commissioner for de novo consideration. We find the following infirmities in the Assistant Commissioner's Order :- (a) Since the revenue has alleged that the concerned process amounts to manufacture in terms of Chapter Note 3 to Chapter 52 of Central Excise Tariff Act, therefore, as per the well settled law the burden of proving the same rests on them. We find that this burden has not been discharged adequately. (b) This is so because in the Order-in-Original learned Assistant Commissioner in para 6.2.4. which is already extracted above, has concluded that the compressive shrinkage amounting to a las ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Expert Opinion from 'South India Textile Research Association'. This Expert opinion, therefore, is the only additional material to be considered in the DE NOVO proceeding. (ii) This Expert opinion of South India Textile Research Association has been considered by the learned Commissioner in the impugned order, inter alia, with other material as appears from para 7 of the order which reads as - "7. The company placed on record and relied upon the expert opinion given by the following experts in he field of textiles : (a) Prof. (Dr.) H.T. Deo, Ph.D. (Tech), D.Sc. Head, Division of Technology of Fibres and Textile Processing, University Department of Chemical Technology (UDCT), Mumbai. (b) The South Indian Textile Research Association (SITRA), Coimbatore. (c) The Northern India Textile Research Association (NITRA) (Linked to the Ministry of Textiles, Govt. of India), Ghaziabad. (d) Shri S.S. Bhandari, B. Text (Bb), VDI (WG), M.B.A (IIM A) with very rich experience in textile processing. (e) The clarification given by SITRA to the queries raised by the Chief Departmental Representative, CEGAT. ……." before he came to his conclusions to the effect of FMDM solu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Commissioner is not bound by the Commissioner's findings; but he would be bound as Judicial Discipline requires him, to follow the Tribunal's decision in Ashima's case, 2003 (108) ECR 430 (Tri), on the very same processes undertaken on same machines on same fabrics and the very notification. The Tribunal vide their order, in this very same Remand order, as seen from Para 14 on that decision, it has been held by them, in Para 14 of the order, that decision in case of Amtex India Pvt. Ltd. of the Tribunal to be not helpful in determining the controversy. This finding of Tribunal has not been appealed by Revenue. In this view of the facts, Revenue's insistence, now therefore, that the remand proceedings should continue, will not serve, any purpose, other than ensuring a formality, that remand order of the Tribunal, would have been complied with. The compliance, if now ordered, would be only resulting, in further delay, in settling an issue, in the very same manner in, which it is settled. Therefore, the plea of remanding the proceedings of SCN dated 6-3-96, after setting aside the order of the Commissioner is not called for, in the facts herein, since the finding of 'Manufacture' n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order the re-determination of the issues in the SCN dt. 6.3.96 by remitting the matter to Assistant Commissioner. (v) Mala fides, bad faith, abuse of powers by the authority, the darker side of an quasi judicial order, must be established by direct evidence or proved on facts and circumstances leading to reasonable and inescapable inference in that regard, to determine the reasonableness or unreasonableness in the context, to call for setting aside the same. No such plea has been made in the points referred by the Board under Section 35E(1) for determination by this Tribunal, nor any such conduct found from the impugned order of the Commissioner. 4. Dealing with the individual grounds, as taken by Revenue, in this appeal, it is found - (i) Issues raised in ground No. 1 to 3 have been dealt and determined in favour of the Respondents. They need not be dealt separately. (ii) Issues raised in ground Nos. 4 to 5, when read collectively go to the proposition - 'the Tribunal vide its remand order dated 4-2-99 in coming to the observations as recorded in Para 17 thereof, was not a correct observations since Deputy Chief Chemist's opinion was an issue different from the opini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve strongly contested these proceedings. There is, therefore, no force in this ground, as found elsewhere in this order. (viii) Ground Nos. 17 and 19 relate to eligibility of deemed credit. Since that was not a point made for reference by the Board for determination by the Tribunal, and in view of findings elsewhere herein on this issue, the grounds are rejected. (ix) Ground No. 20 is a formal prayer, since no reason is found to upset the Commissioner's findings on 'manufacture' and they go to the very root of the issue involved, the order dropping the proceedings is required to be upheld. The ground is rejected in view of the findings arrived in this order. 5. In view of the findings arrived at, the Revenue's appeal is required to be dismissed. 6. The Revenue's appeal is dismissed. 7. Ordered accordingly. Sd/- S.S. Sekhon Member (T) (Pronounced in open Court on) 8. [Contra per : G.A. Brahma Deva, Member (J)]. - I have carefully gone through the proposed order written by my learned brother Shri S.S. Sekhon, Member (Technical). I am unable to agree with the conclusion arrived at by him, in dismissing the appeal filed by the Revenue. Hence this separat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Commissioner could not assume the jurisdiction to decide the matter. He also submitted that even while readjudicating the matter, he has not followed the directions given by the Tribunal. In this context, he said that there is a clear direction by the Tribunal to consider the additional evidence produced by the assessee since the additional evidence is in fact relevant to the issue to be considered to arrive at the truth. Though the Commissioner has referred to the additional evidence placed by the party in para 7 of the impugned order, neither he has discussed the same nor-given a clear finding with reference to the view expressed by the relevant experts. 13. Shri Lakshmikumaran, Learned Counsel, appearing for the respondents, apart from justifying the reasons given by the Commissioner in adjudicating the matter on all the issues said that plea of jurisdiction was not an issue raised in the memorandum of appeal. He said that since the plea with reference to the jurisdiction was not pleaded in the memorandum of appeal, the Department should not be permitted to raise the new plea at this stage. Further, he said that on considering entire evidence placed before him, the Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose will be served in remanding some portion of the matter to the Assistant Commissioner and the rest to the Commissioner. Since the Tribunal has got a power to modify its own order, in the facts and circumstances of this case and since interlinked and connected issues arising out of different show cause notices are to be adjudicated by single adjudicating authority, it is just and appropriate, to remand the matter to the concerned Commissioner. Accordingly, I propose to modify our earlier order to the extent on remanding the matter to the Commissioner instead of Assistant Commissioner. 16. It was also argued by the Senior Counsel for the Revenue that the Commissioner has not followed the directions given by the Tribunal while readjudicating the matter. It appears that he might have proceeded to decide the issue afresh without taking into consideration the directions given by the Tribunal under bona fide impression that the said directions were meant for Assistant Commissioner. Since I propose to remand the matter to the Commissioner, the directions given by the Tribunal in the earlier order are to be complied with. Further, there is sufficient force in the argument advan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referring the matter to the third member. Accordingly, Registry is directed to place this file before the Hon'ble President to refer it to a third member to resolve the issue, in accordance with law. 19. The following point is required to be considered by the third member. "Whether in the facts and circumstances of this case, the appeal deserves to dismissed as held by the Member (Technical) or the appeal deserves to be allowed by way of remand, as per Member (Judicial)?". Sd/- S.S. Sekhon Member (T) Sd/- G.A. Brahma Deva Member (J) 20. [Order per : S.S. Kang, Vice-President]. - Following difference of opinion has been referred to the Third Member. "Whether in the facts and circumstances of this case, the appeal deserves to be dismissed as held by the Member (Technical) or the appeal deserves to be allowed by way of remand as per Member (Judicial)?" 21. In this case the issue involved is whether the process is undertaken by the respondent in respect of fabric amounts to manufacture in view of the Chapter Note 30 to Chapter 52 of Central Excise Tariff. 22. The Chapter Note provides that in relations to the products of Heading No. 5207, 5208 and 5209, ble ..... X X X X Extracts X X X X X X X X Extracts X X X X
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