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Issues Involved:
The issue involved in this case is whether the new articles produced by cutting cotton fabrics into bed sheets, bed spreads, table clothes, etc., are exigible to duty under Tariff Item 19(I) even if the raw material had already suffered duty under the same tariff item. Judgment Details: 1. The Assistant Collector of Central Excise made a demand on the respondent for clandestine clearance of goods, which was confirmed by the Commissioner of Central Excise. The respondent appealed to the Customs, Excise & Gold (Control) Appellate Tribunal, which allowed the appeal on 3-8-1998. 2. The Revenue appealed the Tribunal's decision, arguing that the new products manufactured from cotton fabrics are distinct marketable commodities and should be subject to duty again, even if the raw material had already been taxed. The Tribunal's view that new products emerging from the same material are not liable for fresh duty was deemed erroneous. 3. Upon reviewing the orders, it was established that the respondent had indeed created new marketable commodities by cutting and shaping cotton fabrics into new articles like bed sheets and table clothes. 4. The key question was whether these new articles are subject to duty under Tariff Item 19(I). The Tribunal's interpretation that products made from material already taxed are not dutiable was found to be incorrect. A previous case precedent was cited to support the position that if distinct, separate, and identifiable goods are manufactured, duty is applicable. 5. The judgment clarified that even if the raw material had been taxed under a specific tariff item, the finished products could still be liable for duty if the Tariff Act specifies it. In this case, since the Tariff Act includes bed sheets and pillow covers under the same tariff item as the cotton fabric, the respondent was held liable to pay duty on the manufactured goods. 6. Consequently, the appeal was allowed, the Tribunal's decision was overturned, and the Commissioner's order was reinstated.
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