TMI Blog2008 (3) TMI 210X X X X Extracts X X X X X X X X Extracts X X X X ..... cko, Member (J) and P. Karthikeyan, Member (T) Shri N.J. Kumaresh, SDR, for the Appellant. None, for the Respondent. [Order per: P. Karthikeyan, Member (T)]. - This is an appeal filed by the Commissioner of Central Excise, Coimbatore. As per the impugned order, the Commissioner dropped the proposal to deny the exemption from duty extended by Notification No. 253/82 dated 8-11-82 to 'cotton polyester blended lungi fabrics' falling under the CSH. 52.06 of Central Excise Tariff processed and cleared by M/s. Coimbatore Pioneer Mills Ltd., Erode (CPM). He also dropped the proposal to confiscate the seized 196.9 L.M of processed cotton polyester lungie fabrics. The processes undertaken by the respondents declared were washing, ste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hemselves had agreed that chemical padding undertaken by them amounted to process of manufacture. Another ground taken is that there was no standard definition of 'standard of permanence'. Though CBEC vide their letter F.No. 52/10/89-CX dt. 18-10-89 had clarified that use of chemicals in addition to natural starch would not deprive the benefit of notification, there was no evidence of use of natural starch in padding process by the respondents. The Commissioner had erred in finding that the respondents had not undertaken mercerizing without positive evidence. The Commissioner had dropped the proposal to penalize the respondents under Section I1AC and under Rule 173Q without justification. The appellant prayed for modifying the impugned orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... solution containing ingredients like small amount of optical agent, wetting agent, fatty matter and fillers like china clay, would also be covered by the term padding referred to in Notification No. 253/82, dated 8-11-82. In the instant case, we find that padding is done not only with starch but also with Ranipal, Servolin, softener SHC, Aristofin, Polycol and French chalk. In fine, the fabrics were subjected to the process of chemical padding in water using the softening and other chemicals. Servolin was natural starch purchased from M/s. Laxmi Starch Ltd. In CBEC Circular No. 16/CE/89-CXI, dated 24-10-89, it was clarified that padding with Taffinol Anu alone, without starch would not be eligible for exemption under Notification No. 152/8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the concept of manufacture and 'any other process' in the section must share one or the other of these incidents. The expression 'any other process' is used in the context of what constitutes manufacture in its extended meaning and the expression 'unprocessed' in the exempting notification draws its meaning from that context. As per the ratio of the above judgment, any activity such as padding with starch and chemicals, and special finishing are not processes of manufacture. Therefore subjecting cotton polyester dyed lungi fabrics to padding and the special processes, we find, do not constitute manufacture. We concur with the Commissioner in his finding that the allegations and proposals against CPM were not well founded. Accordingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation does not cover or cover a process for exemption is not material. By applying starch with some chemicals and the special process identified, the fabrics acquire the quality of stiffness and sheets which vanishes after a couple of washes. Such a process which does not bring into existence goods with a new name, properties or uses cannot be held to be manufacture. Apex Court has found that the Note 3 to Chapter 52 does not in effect lay down a deeming provision as regards manufacture. Therefore the impugned goods cannot be subjected to further duty liability on account of the impugned process. Accordingly, we dismiss the appeal filed by the revenue. (Order pronounced in the Open Court on 17-3-2008) - - TaxTMI - TMITax - Central E ..... X X X X Extracts X X X X X X X X Extracts X X X X
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