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1994 (1) TMI 300

vocate, for the Appellants. Shri Somesh Arora, JDR, for the Respondent. ORDER [Order per : G.P. Agarwal, Member (J)]. - This appeal is directed against the impugned Order-in-appeal passed by the Collector of Customs and Central Excise (Appeals), Madras. 2. Shortly put the facts of the case are that, the appellants are engaged in the manufacture of Wadding, Bandages and Gauze. The Assistant Collector classified these goods under Heading 30.04 and confirmed the demand raised in the Show Cause Notice dated 28-8-1986 rejecting the claim of the appellants for the classification of the subject goods under Heading 30.03. Against that Order of the Assistant Collector the appellants filed the appeal before the Collector (Appeals), but with .....

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the appellants amounts to manufacture or not with respect to the subject goods, he submitted as under : - (i) Gauge and Bandage  These gauze materials and bandages are handloom materials. The appellants buy them in grey state and bleach them with the aid of steam and cut the cloth to sizes and pack them for sales, and therefore, this activity does not amount to manufacture. (ii) Cotton Absorbent Wool  The appellants buy raw cotton and waste cotton and bleach them and thereafter card them which is specifically classified under Chapter 52, Heading 5202.00 as cotton carded or combed - nil rate . 6. To support his said contention, he cited the following cases - (i) Collector of Central Excise v. Lakaki Works (P) L .....

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lls Ltd. v. Collector of Central Excise, Baroda, 1993 (67) E.L.T. 109 (Tri.) = 1993 (21) E.T.R. 631 and Central Pulp Mills Ltd. v. Collector of Central Excise, Surat, 1995 (75) E.L.T. 882 (Tri.) = 1993 (21) E.T.R. 723. 8. In reply, Shri Somesh Arora, learned JDR, submitted that the appellants should not be allowed to raise the additional ground, as prayed for. On merits, he submitted that the process of manufacture, as submitted by the appellants, itself goes to show that the activity undertaken by the appellants amounts to manufacture. As regards the contention of the learned counsel for the appellants that the authorities below should have allowed the permissible deductions while computing the duty payable, he contended that both the .....

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urgical or veterinary purposes and therefore, the process of converting loose woven fabrics into gauze bandage is a process of manufacture within the meaning of Section 2(f) of the Central Excises and Salt Act, 1944 and attracts duty as applicable to the said commodity. Further the said goods are well known in the trade parlance as a different commodity or article from one used as a base material, has a distinct name, character and use as such meaning given to article or product in a fiscal statute as people in trade conversant with sufficient knowledge and understand them in usual course. These satisfy the tests laid down by the Hon ble Supreme Court in various judgments. 12. As regards Wadding that is to say absorbent cotton wool the .....

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id not pay duty during the period March, 1986 to August, 1986. Consequently the price at which they sold the goods should form the basis for assessment and their plea that the value be treated as cum-duty value cannot be accepted as the incidence of excise duty was not made clear in the invoices. While dealing with the said contention in appeal, the Collector (Appeals) also observed as follows : Section 4(4)(d)(ii) reads as follows : Value in relation to any excisable goods does not include the amount of the duty of excise, sales tax and other taxes, if any, payable on such goods. By explanation it is stated that the amount of the duty of excise payable on any excisable goods shall be the sum total of the effective duty of excise payable on .....

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