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2003 (3) TMI 105 - SC - Central ExciseWhether there was an error apparent on the face of the record of the judgment dated 15-6-1998 as argued by the led coarneunsel for the appellant? Whether the Tribunal has erred in holding that the Taspa yarn is classifiable and assessable to duty of excise under Heading No. 56.06? Held that - The yarn manufactured by the appellant is only Taspa yarn/fancy yarn and is classifiable and chargeable to duty under Chapter Heading No. 56.06 of the Central Excise Tariff and, therefore, the appellant is liable to pay duty in contravention of Rule 174 read with Section 6 etc. of the Central Excise and Salt Act, 1944. No error of law or any perversity in the reasoning adopted by the Commissioner or by the Tribunal on the facts of these cases. On the contrary, in our view, the decision of the Commissioner and the Tribunal are well sustained on the evidence on record and calls for no interference in these appeals moved by the appellant. The orders passed by the Commissioner as confirmed by the Central Excise and Gold (Control) Appellate Tribunal confirmed and reject these appeals.
Issues Involved:
1. Classification of 'Taspa' yarn under Central Excise Tariff. 2. Applicability of exemption notifications. 3. Alleged error apparent on the face of the record. 4. Validity of the demand for duty and imposition of penalty. 5. Comparison with previous Tribunal decisions. Detailed Analysis: 1. Classification of 'Taspa' Yarn under Central Excise Tariff: The primary issue was whether 'Taspa' yarn manufactured by the appellant should be classified under Heading No. 56.06 of the Central Excise Tariff. The Tribunal held that 'Taspa' yarn fell under Heading No. 56.06, making it subject to excise duty. This classification was based on the technical characteristics of the yarn, which included the presence of core yarn and special effects produced by specific manufacturing processes. The Tribunal's decision was supported by the Chemical Examiner's report, which described the yarn as having elongated strips (knots) at regular intervals, made from textured polyester filament yarn and viscose filament yarn. The manufacturing process involved the use of specialized attachments like Tensor and ceramic guides, which were not required for simple crimping. 2. Applicability of Exemption Notifications: The appellant argued that the doubled or multifolded yarns were exempt from excise duty under certain notifications (e.g., Notification M.F. (C.D.R.) I. No. 114/18/86-CX. 3, dated 18-4-1986). However, the Tribunal found that these notifications were not applicable because the yarn in question was a special yarn with a core yarn, falling under Heading No. 56.06. The Tribunal noted that the appellant's reliance on the exemption was misplaced as the product did not meet the criteria for exemption. 3. Alleged Error Apparent on the Face of the Record: The appellant contended that the Tribunal's judgment dated 15-6-1998 contained an error apparent on the face of the record. They argued that the Tribunal failed to consider the similarity of their case with the Pratik Crimpers case, where the yarn was classified differently. However, the Tribunal rejected this argument, stating that the manufacturing processes and the presence of core yarn in the appellant's case justified the classification under Heading No. 56.06. The Tribunal also noted that the decision in the Pratik Crimpers case was not directly applicable due to differences in the facts and manufacturing processes. 4. Validity of the Demand for Duty and Imposition of Penalty: The Collector of Central Excise confirmed the demand for duty amounting to Rs. 5,63,066.40 and imposed a penalty of Rs. 2 lakhs, which was later reduced to Rs. 50,000 by the Tribunal. The Tribunal upheld this decision, finding that the appellant had engaged in manufacturing and removing excisable goods without payment of duty, thereby evading excise duty. The Tribunal noted that the appellant had not obtained the necessary Central Excise license and had failed to comply with various procedural requirements, such as filing classification lists and maintaining statutory accounts. The conduct of the appellant was found to be in violation of several provisions of the Central Excise Rules, 1944, inviting the imposition of penalties. 5. Comparison with Previous Tribunal Decisions: The appellant argued that the Tribunal should have followed its decision in the Pratik Crimpers case, where similar yarn was classified under a different heading. However, the Tribunal distinguished the present case based on the specific facts and the presence of core yarn in the appellant's product. The Tribunal also referred to the decision in the Vasania Silk Mills case, which upheld the classification of similar yarn under Heading No. 56.06. The Tribunal found that the decisions in the Pratik Crimpers and Dhamanwala Silk Mills cases were not directly applicable due to differences in the facts and manufacturing processes. Conclusion: The Supreme Court upheld the Tribunal's decision, confirming the classification of 'Taspa' yarn under Heading No. 56.06 of the Central Excise Tariff. The Court found no error of law or perversity in the Tribunal's reasoning and dismissed the appeals. The Court emphasized that the findings of the Tribunal were based on substantial evidence and technical analysis, and there was no basis for interference. The demand for duty and the imposition of penalty were also upheld, with the Court noting that the appellant had engaged in willful evasion of excise duty through misstatement and suppression of facts. The appeals were dismissed with no order as to costs.
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