TMI Blog1989 (1) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... 1)(b) - 3695-96 of 1988 - - - Dated:- 17-1-1989 - R.S. Pathak, CJ and M.N. Venkatachaliah, J. [Judgment per : M.N. Venkatachaliah, J.]. - These two appeals under Section 35L of the Central Excises and Salt Act, 1944 [Act] by Messrs Mafatlal Fine Spinning Manufacturing Co. Ltd., arise out of and are directed against the common appellate-order dated 10-2-1987 of the Customs, Excise Gold (Control) Appellate Tribunal in Appeal Nos. 1105 of 1983 and 2540 of 1987 holding that in respect of the deferred duty on yarn appellant is liable to pay interest at 3 per cent of the duty under Rule 49A(2) of the Central Excise and Salt Rules, 1944, as according to the Tribunal, the cotton-fabric cleared is not 'Grey' (unprocessed) cotton-fabric. 2. Appellant is engaged in the manufacture of cotton-fabrics in its composite mills and opted under Rule 49A for facility of payment of duty of excise payable on the yarn to be deferred until the clearance of the cotton-fabrics manufactured there from. The said Rule 49A provides for payment of interest on the excise duty payable on the yarn which is deferred till the manufacture and clearance of the fabrics made out of the dutiable yarn. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... losic spun yarn, or cotton yarn, or both, as the case may be; plus (b) three per cent of the duty payable on such cellulosic spun yarn, or cotton yarn, or both, as the case may be, by way of interest on the amount of yarn duty: Explanation. - Omitted as unnecessary." 5. Shri Sorabjee contended that such controversy, as is raised, as to whether the fabric, after 'calendering' and 'shearing' ceases to be 'unprocessed' fabric would require to be resolved on the language of the Rule 49A itself and that the differentium for the attraction of the different rates of interest was whether the cotton-fabrics cleared were 'grey-fabrics' as known and understood in the textile industry. The learned counsel emphasised the distinction between the expressions in Rule 49A(1) which refer to the expression "cotton fabrics are cleared grey (unprocessed)", on the one hand and the expression "cotton fabrics are cleared after processing" in Rule 49A(2) on the other, to demonstrate that the condition for levy of 11/2% is not whether some process or processes were applied to the 'grey fabrics' but whether such process or processes to which the grey-fabric was subjected had the effect of making such ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he wisdom of the rule-makers, be the delay incidental to converting 'grey fabric' into 'processed' fabric which ceases to be 'grey-fabric'. With this legislative estimate of the period of deferment appropriate to a situation attracting 3% interest, the matter has necessarily to be examined by those standards, which in turn, bring in the idea whether the process or processes concerned are such as to change the nature of the 'grey fabric'. This leads to the question whether 'calendering' and 'shearing', though by themselves are finishing processes, render the 'grey' fabric cease to be so. 8. Shri Sorabjee submitted that the process of calendering is nothing more than mere pressing of the 'grey fabric' by running it through plain rollers to impart a better finish, which is a mere temporary finish. Shri Sorabjee referred to some of the notifications issued under Section 8(1) of the Act which say that calendering would not be treated as "processing". Learned Counsel contended that having regard to the very nature, the calendering does not bring about any change in the quality of the goods. In Siddeshwari Cotton Mills' case: 1984 (18) E.L.T. 297 (Tribunal), the Tribunal has referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are mechanically cut or trimmed from the face of the fabric. Almost always employed for woolen and worsted and extensively employed on other fabrics. The amount of shearing on napped and pile fabrics varies according to the desired height of the nap or pile; on clear-finish fabrics like gabardine, a very close shearing is given. 3. A finishing operation in which floating portions of yarn are cut, e.g., in extra warp or extra filling figured fabrics. The method is similar to that employed in #2, above." In "Textile Terms and Definitions" 8th Edition by the Textile Institute : "SHEAR: (1) To cut the fleece from a sheep. (2) ............................................ (3) To cut loose fibres or yarn from the surface of a fabric after weaving (also called crop)." In Handbook on Glossary of Textile Terms (Bureau of Indian Standards) : "SHEARING - Shearing indicates : (a) Cutting fleece from live sheep, (b) Trimming nap or pile to the required uniform height, and (c) Removing all protruding fibres from the surface of the fabric i.e. cropping. 10. Both 'calendering' and 'shearing' involve an assortment and variety of processes, some of which might and some others m ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
