2005 (1) TMI 144 - AT - Central Excise

Summary

Issues:
1. Disallowance of exemption on waste including noil yarn waste and garnetted stock of man-made fabrics of polyester.
2. Interpretation of conditions stipulated in S.No.110 of Notification No. 4/97-C.E.
3. Determination of manufacturing process for polyester fibres by polymerisation.
4. Analysis of expert opinions from Chief Chemist and Northern India Textile Research Association.
5. Comparison with a previous judgment regarding polymerisation of monomers.

Analysis:

1. The issue at hand involves the disallowance of exemption on waste, including noil yarn waste and garnetted stock of man-made fabrics of polyester, under Notification No. 4/97-C.E. The department's decision was based on the conditions stipulated in S.No.110 of the notification, which were deemed unfulfilled.

2. The Tribunal analyzed the interpretation of the conditions specified in S.No.110 of the notification, which provides exemption to goods produced in a factory other than one producing man-made staple fibres or man-made filament yarns of organic polymers through specific manufacturing processes.

3. The determination of the manufacturing process for polyester fibres by polymerisation was crucial in this case. The Chief Chemist's report highlighted that waste generated during the manufacturing process involving polymerisation of polyester fibres is not covered by the relevant notification. However, the Northern India Textile Research Association's opinion differed, stating that the appellants were not producing polyester staple fibre by polymerisation of organic polymers.

4. Expert opinions from the Chief Chemist and the Northern India Textile Research Association played a significant role in the decision-making process. While the Chief Chemist's report focused on the polymerisation process starting from raw materials like DMT and ethylene glycol, the Northern India Textile Research Association certified that the appellants were not manufacturing man-made staple fibre by polymerisation of organic polymers.

5. In a comparative analysis with a previous judgment involving the manufacture of acrylic staple fibre, the Tribunal noted that the process of polymerisation of monomers was distinct from polymerisation of organic polymers. Based on this distinction and the expert opinions presented, the Tribunal concluded that the benefit of exemption under Notification No. 4/97-C.E. was admissible to the appellants, leading to the setting aside of the impugned order and allowing the appeal.