1999 (9) TMI 453 - AT - Central Excise

Summary

Issues:
Interpretation of Notification No. 90/94-CE as clarificatory, exemption for doubled/multifolded yarn, retrospective nature of the notification, process of doubling or multifolding yarn not amounting to manufacture, marketability of the product, duty liability for the interim period.

Analysis:
The appeal stemmed from the Commissioner (Appeals) negating the plea that Notification No. 90/94-CE was not clarificatory, leading to a duty liability for the appellants for the period of 1-3-1994 to 24-4-1994. Initially, partial waiver was granted based on the retrospective nature of the notification, and a sum was pre-deposited. The appellants sought early hearing citing a judgment by the Hon'ble Apex Court regarding the process of doubling or multifolding yarn not constituting manufacture, which led to the matter being listed for final hearing. An additional plea was raised through a Miscellaneous application, asserting that the process in question did not amount to manufacture, a ground allowed by the Tribunal after due consideration.

The Tribunal heard arguments from both sides, with the appellants relying on judgments emphasizing that the process did not create a new product. The Revenue contended that amendments to the Central Excise Tariff made the item dutiable, creating a legal fiction for treating the process as manufacture. The appellants proposed the appeal's disposal based on the non-excisability of the item, while the Revenue suggested a remand to assess marketability. However, the Tribunal, after careful consideration, concluded that the Hon'ble Apex Court had settled the issue of non-excisability and the lack of new commodity creation through the process. Referring to past judgments, including one from 1995, the Tribunal highlighted that the issue had been extensively examined previously, leading to the determination that doubled or multiple fold yarn was not a distinct commodity from single yarn. Consequently, without delving into the retrospective nature of the notification, the Tribunal held that the process did not result in a new product and set aside the demands raised, ultimately allowing the appeal.

In summary, the Tribunal's decision revolved around the interpretation of Notification No. 90/94-CE, the nature of the process of doubling or multifolding yarn, and the marketability of the resulting product. The Tribunal relied on past judgments and the Hon'ble Apex Court's rulings to establish that the process did not amount to manufacture, hence no duty liability existed for the appellants. The Tribunal's detailed analysis and reference to legal precedents underscored the conclusive nature of the issue, leading to the setting aside of the demands raised and the allowance of the appeal.