1994 (4) TMI 125 - AT - Central Excise

Summary

Issues:
1. Whether the appellants are entitled to exemption under Notification No. 253/82 for their process of Denim Cloth using a foam spraying machine.
2. Whether the process undertaken by the appellants amounts to manufacture and is exempted under the notification.
3. Whether the addition of Alkosin-SR foam during the processing qualifies as a separate manufacturing process.
4. Whether the activity undertaken by the appellants falls under the processes specified in the notification for exemption.

Analysis:
The appeal was against the Order-in-appeal passed by the Collector of Central Excise (Appeals), Ahmedabad, where the appellants, engaged in Denim Cloth processing, claimed exemption under Notification No. 253/82 but were found using a foam spraying machine with Alkosin-SR solution for lustre and softness. The Department contended that the process exceeded simple calendering or damping, leading to duty payment demand and a penalty. The appellants argued citing a previous case and Supreme Court order, claiming the process did not amount to manufacture and should be exempt. The Department argued that the process was beyond those specified in the notification, thus not eligible for exemption.

The Tribunal considered the arguments and records, concluding that the appellants' activity, involving a foam spray machine with Alkosin-SR on Denim Cloth, went beyond the processes listed in the notification. The process was deemed more than simple calendering or damping, as observed by the Collector (Appeals). The Tribunal noted that the activity did not fall under the specified processes for exemption, leading to the dismissal of the appeal.

The key point of contention was whether the appellants' process qualified for exemption under Notification No. 253/82. The Department argued that the process exceeded the specified processes, while the appellants relied on a previous case to support their claim of not constituting manufacture. The Tribunal upheld the Department's view, emphasizing that the activity undertaken was not covered by the listed processes for exemption, resulting in the denial of the appeal.

The appellants' use of a foam spraying machine with Alkosin-SR solution was central to the dispute, with the Department contending that this additional step constituted a separate process beyond those specified in the notification. The appellants argued that the addition of the foam did not alter the fabric significantly, but the Tribunal agreed with the Department's interpretation, leading to the denial of the exemption claim.

Overall, the Tribunal's decision hinged on whether the appellants' process fell within the specified processes for exemption under Notification No. 253/82. The Tribunal found that the activity involving the foam spraying machine and Alkosin-SR solution went beyond the listed processes, thereby disqualifying the appellants from the exemption, as determined by the Collector (Appeals).