TMI Blog1985 (8) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... 1(2) of Item No. 19 of the First Schedule to the Central Excises and Salt Act, 1944 and specified in Column (2) of the second Table from so much of the duty of excise leviable thereon as is in excess of the duty specified in the corresponding entries in Column (3) of the Table. The relevant entries in the Table read as follows: The Second Table DUTY Sl. No. Variety of fabrics on entry into the factory Variety of fabrics at the time of clearance from the factory on payment of duty. Category A In the case of fabrics made from grey fabrics which have not been manufactured in a composite mill and which have already paid duty or are exempted from duty, when processed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e view that excise duty was leviable under Items 5(a) and (b) and not under Items 10(a) and 10(b), issued a notice to the respondent to show cause as to why the respondent should not be re-assessed and the differential duty recovered under Rule 10 of the Central Excise Rules, 1944. The respondent herein raised the contention before the Assistant Collector that since cotton fabrics were woven out of bleached and/or dyed yarn, the fabric was also bleached and/or dyed fabric, and, therefore, the correct rate of duty applicable was the one provided in Item 10(a) and (b) of the notification. This contention was negatived by the Assistant Collector who took the view that "merely because the fabrics were woven out of bleached and/or dyed yarn, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eviable under Item 5(a) and (b), the respondent must show that the variety of fabric on entry into the factory was bleached and/or dyed. In other words, according to the learned counsel, the respondent must show that it was bleached and/or dyed fabrics which had entered into the factory. The contention is that what has gone into the factory for processing is not a fabric which is bleached and/or dyed though it may be a fabric which is made out of bleached and/or dyed yarn. Consequently, according to the learned counsel for the Revenue, the fabrics which are subjected to processing by the respondent will not fall under Item 10(a) or (b), but must necessarily fall under Item 5(a) and (b) which refer to grey fabrics. Learned counsel also invit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory for the purpose of processing was subjected to either dry or wet finishing operation, the fabric must be considered as grey fabric. 7. Another limb of the same argument is that merely because the fabric is woven out of bleached or dyed yarn, the fabric itself does not become bleached or dyed fabric. 8. Having considered the argument of the learned counsel for the Revenue, it is difficult for us to accept the argument that a fabric which is made out of bleached and/or dyed yarn must be treated as grey fabric merely for the reason that after the fabric is made, it is not subjected to either dry finishing operation or wet finishing operation. The argument of the learned counsel for the Revenue assumes that a fabric which is woven out o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yarn are as understood in the textile field is fabrics bleached and/or dyed." This affidavit therefore shows that a fabric which is woven out of yarn which is bleached and/or dyed is not required to be further bleached or dyed. The affidavit also shows that in the textile field such a fabric is recognised as fabric bleached and/or dyed. The averments in the affidavit have not been controverted on behalf of the Revenue. 10. While considering the nature of-the goods for the purpose of levy of excise duty, it is now well settled that the description by which the goods are known in the commercial world will be relevant for deciding whether they fall in one category of goods or another. Apart from the fact that fabrics woven out of bleached ..... X X X X Extracts X X X X X X X X Extracts X X X X
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