9911796707
TMI Blog2017 (1) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... f being spun into yarn. Against the confirmation of demand in the order-in-original the appellant filed these appeals. 2. Shri J.C.Patel, Learned Counsel for the appellant along with Shri D.H. Nadkarni, Advocate appearing on behalf of the appellant submits that the appellant is engaged in the process of garneting of the synthetic waste. He submits that with regard to their classification declaration filed under Rule 173B the jurisdictional Range Superintendent vide its letter dated 02/12/1999 clarified that garneting/carding does not amount to manufacture as per CBEC Circular No. 91/2/95-CX dated 13/01/1995. He further submits that the department again in 1996 vide their letter dated 07/10/1996 informed that in terms of Chapter Note 3 to Chapter 55 of Central Excise Tariff Act, 1985 garnetted fibre waste remains as waste under Chapter Heading 55.05 and, therefore, does not amount to manufacture and hence Central Excise registration is not required of this purpose. He also refers to the letter dated 25/01/1995 issued by the Assistant Collector of Central Excise, Pune I Division wherein, though the goods were seized under panchanama dated 15/09/1994 but the same was vacated an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence about the registration and dutiability of the said product. Therefore, even the department was of the view that after insertion of Chapter Note 3 under Chapter 55, the process amount to manufacture, then the department could have initiated the action well within the stipulated time period. Therefore, the extended period of time cannot be invoked as there is no suppression of fact on the part of the appellant. In this regard he place reliance on the judgments of Nizam Sugar Factory v. Collector of Central Excise, A.P. 2006 (197) ELT 465 (SC). 4. He further submits that on identical issue, the very same Commissioner, while deciding the appeal in the case of M/s Blumount Fibres Pvt Ltd, Badlapur has dropped the demand. However, in the present case, in the impugned order, the Commissioner, even after considering the said fact of Bluemount Fibres Pvt Ltd distinguished the same on the basis, that order was passed mainly on the Board s Circular 91/2/95-CX dated 13/01/1995 and Supreme Court s decision based on that circular whereas in the present case the matter has to be examined in the light of amendment to Central Excise Tariff Act, 1985. This clearly shows that without any proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... machine. Therefore, the goods i.e. waste after garnetting are not excisable." 7. From the above decision it was clearly held that the goods i.e. waste after garneting is not excisable as it does not involve emergence of different commercial commodity with characteristics different from the raw material. Despite the above judgment, Revenue has heavily relied upon the Chapter Note 3 which was inserted in Chapter 55 of Central Excise Tariff Act, 1985 which is reproduced below: "3. In relation to the products of headings 5506, 5507, 5508, 5509, 5510, 5511, 5512, 5513, 5514, 5515 and 5516 and the entries relating thereto, the expression "staple fibres" shall include waste of synthetic staple fibres or filaments and waste of artificial staple fibres or filaments after they have been carded, combed or otherwise processed for spinning." 8. From a plain reading of the above referred Chapter Note it can be seen that the Chapter Note is for the purpose of classification of the waste of synthetic staple fibres but it does not declare that the process of garneting/carding amount to manufacture , unlike certain process given in Chapter Note 4, which is reproduced below: "4. In relation to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exempts all goods, if manufactured in the workshop, situated within the precincts of mines and intended for use in such mines. It has not been disputed by the Revenue that the Appellants are sending ammonium nitrate, diesel oil and emulsion matrix separately to the mine in their mobile van specifically designed for preparation of bulk explosives. The mobile van carries all ingredients to the mine site and at the mine site these ingredients are mixed in the forth compartment of the mobile van to become bulk explosive which is immediately delivered to the bore hole. We find substance in the submissions of the Appellants that only after mixing of the ingredients the bulk explosive comes into existence. The process of manufacture takes place only at mines and not in the factory. Note 2 to Section VI is in respect of classification of the products which are put up in sets consisting of two or more separate constituents and are intended to be mixed together to obtain a product of Section VI or Section VII. The said Note provides that the product is to be classified in the Heading appropriate to the product subject to the condition specified in the Note. In our view Note 2 has no applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it must be specified that the process amounts to manufacture. Merely setting out a process in the Tariff Entry would not be sufficient. If the process is indicated in the Tariff Entry, without specifying that the same amounts to manufacture, then the indication of the process is merely for the purposes of identifying the product and the rate which is applicable to that product. In other words, for a deeming provision to come into play it must be specifically stated that a particular process amounts to manufacture. In the absence of it being so specified the commodity would not become excisable merely because a separate Tariff Item exists in respect of that commodity.In view of the above judgment it is very clear that in the present case though in Chapter Note 3 the same process was referred but does not mention that a particular process such as garneting/carding amounts to manufacture. In the absence of such mention by applying Chapter Note 3 the process cannot be held to be manufacture of excisable goods." 12. As per our above discussion we find that prior to insertion of Chapter Note 3 it was clearly held in Amritsar Swadeshi Woollen Mills (supra) that garneting is not amounting ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
