2005 (2) TMI 228 - AT - Central Excise

Summary

Issues involved:
1. Whether doubling of yarn is liable to duty under Notification 35/95-C.E.

Analysis:
The Appellate Tribunal CESTAT, Mumbai, addressed the issue of whether doubling of yarn is subject to duty under Notification 35/95-C.E. The appellant, having the facility to manufacture single yarn, claimed the benefit of the said notification. However, the notification was amended by Notification No. 84/95-C.E., which added a proviso stating that the exemption would not apply to clearances of yarn from a factory capable of producing single yarn. The tribunal referred to Note 1 of Chapter 52, which defines processes like doubling as constituting 'manufacture,' indicating liability for duty. Citing a similar case, the tribunal held that the appellant was not eligible for the exemption due to the proviso in the amended notification. Consequently, the duty demand was upheld, but the penalty was set aside, allowing the appellant to claim credit for duty paid on single yarn.