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Perfect Thread Mills Ltd. Versus Commissioner of Central Excise, Jaipur-II

2016 (1) TMI 1058 - CESTAT NEW DELHI

Dutiability and classification of Polyester Sewing Thread - Held that:- The Polyester Sewing Thread is distinctly known in the market and the yarn purchased by the appellant apparently cannot be marketed or used as the Sewing Thread. The Original Authority held that “the only processes adopted by the assessee are dyeing and rewinding of the yarn on cones. Obviously this is not manufactured”. How appellants came to the conclusion that the process does not amount to manufacture is not clear.
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6. The Board clarified that the argument that there was a definition of Sewing Thread for all the headings except Heading No. 55.04 for the tariff is not really relevant so far as the dutiability of Sewing Thread is concerned. The dutiability does not arise by virtue of the fact the definition of Sewing Thread was provided for in certain headings, but by virtue of the fact that the process of making Sewing Thread out of single thread/yarn is basically a process of manufacture under Section 2(f). .....

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. Ravichandran, Member (T)]. - The appellants are engaged in production of Polyester Sewing Thread using Yarn purchased by them. They also carry out processes of dyeing and winding of the said yarn. The present appeal relates to the dutiability and classification of Polyester Sewing Thread produced by the appellants. 2. The brief facts of the case are that the appellants filed classification list for Polyester Sewing Thread claiming CTH 5504.29 (1994-1995) and CTH 5508.10 (1995-1996). They .....

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ner (Appeals) upheld the order. Aggrieved by the said appellate order, the appellant filed appeal before this Tribunal who vide their final order dated 27-9-2000 remanded the matter back to the Adjudicating Authority for fresh decision. The matter was decided afresh by the Assistant Commissioner. Learned Assistant Commissioner held that Polyester Sewing Thread is not a manufactured product and hence not dutiable up to amendment made in Chapter Note under Chapter 55 in the year 1996. He held that .....

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olded or cabled yarn as defined in the Tariff. They contended that yarn and Sewing Thread are one and the same and no new commercially different product comes into existence. They also contended that the deemed manufacture provision as per Note 2 of Chapter 55 does not extend to the Tariff heading covering Sewing Thread. 4. During the arguments, the learned Counsel for the appellants explained with photographs the process undertaken by them after purchasing Polyester yarn. She contended tha .....

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d use and is certainly known in the market as a product of particular name and usage for which the yarn cannot be put into. There is no inter-chargeable usage of these two products, namely yarn and thread, and for excise purpose the thread is emerging due to processes which amount to manufacture. 5. Heard both the sides and considered the appeal papers carefully. 6. We find that in the impugned order, the learned Commissioner (Appeals) examined the relevant issues. On the point regardi .....

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d. As correctly pointed out by the learned Commissioner (Appeals) it is not their (appellants) case that they have purchased Sewing Thread from the market and apply certain processes on such Sewing Thread. We find that the Original Authority laid much emphasis on the deeming provision of manufacture and also held that simple mentioning of any goods in the Tariff Schedule does not mean that the goods have been manufactured. We find that the Original Authority has not directed his attention to the .....

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