1993 (3) TMI 205 - AT - Central Excise

Summary

Issues:
1. Whether the process of crimping yarn amounts to a process of manufacture under the Central Excises and Salt Act, 1944.
2. Whether the duty should be levied on flat yarn before crimping or after crimping.
3. Interpretation of Notification No. 55/78 dated 1-3-1978 regarding the levy of duty on crimped yarn.
4. Whether the conversion of flat yarn into textured yarn constitutes a process of manufacture.
5. Validity of the Assistant Collector's order and the Appellate Collector's decision.
6. Applicability of Central Excise Rules and relevant provisions for the levy of duty on excisable goods.

Analysis:
The case involves an appeal by M/s. Garware Nylons Ltd. challenging the order of the Assistant Collector of Central Excise regarding the levy of duty on crimped yarn. The appellants argue that crimping yarn does not constitute a process of manufacture under the Central Excises and Salt Act, 1944. They contend that duty should be charged on yarn after crimping, not on flat yarn before crimping. The appellants rely on market practices and notifications to support their argument. However, the Tribunal observes that crimping yarn is a separate process from producing flat yarn, constituting a process of manufacture. The Tribunal rejects the appellants' argument that flat yarn and crimped yarn are indistinguishable in the market, citing evidence to the contrary.

The Tribunal further examines Notification No. 55/78 dated 1-3-1978 and clarifies that it pertains to exemption from duty, not the stage at which duty is levied. The Tribunal emphasizes that under the Central Excise Law, duty is chargeable as prescribed by Section 3 and the Central Excise Rules. The Tribunal upholds the Assistant Collector's order, stating that duty must be levied on flat yarn before its conversion into textured yarn. The Tribunal dismisses the appellants' contentions regarding the historical distinction between flat yarn and crimped yarn, emphasizing the current classification under the Central Excise Tariff.

The Tribunal also addresses the stay granted on duty recovery, noting that it will be terminated with the rejection of the appeal. The Tribunal advises the appellants to pursue their remedy through the Collector of Central Excise (Appeals) before approaching the Tribunal again. In conclusion, the Tribunal finds none of the appellants' contentions acceptable, affirming the legality of the duty levy process and the Assistant Collector's order.

This detailed analysis provides a comprehensive overview of the legal issues, arguments presented, and the Tribunal's findings in the judgment.