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TMI Blog1986 (7) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... dyeing and bleaching department. Dyeing and bleaching department was also receiving duty paid grey yarn from other factories. The case against the Modella Textile Industries Ltd. is that they did not file proper classification list for hand-knitting acrylic yarn processed and cleared by them. They retained certain quantities of such goods within the factory without proper accountal and cleared some of them without valid Central Excise transport document and without payment of duty. Modella Textile Industries Pvt. Ltd. have defended this by stating that they were processing duty paid grey yarn for a long time without any objection by the Department, and that they had duly filed classification list for the grey acrylic yarn manufactured by them although they did not state whether this was grey or dyed, and such classification list was duly approved by the Departmental officers. They have admitted that RG I and other excise records were maintained for the grey yarn and not for processed yarn. It is further contended by Modella Textile Industries Pvt. Ltd. that their grey hand-knitting yarn was assessed under Notification No. 27/75, dated 1-3-1975. There was, therefore, no question of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i), (ii) (iii) of Explanation I also. It is submitted that these words would apply only in respect of sub-clause (iv) of Explanation I dealing with man-made filament continuous yarn and is, therefore, not applicable to them, since their yarn is classed as spun discontinuous yarn containing 100% man made fibres. 7. It is further pointed out that the show cause notice is vague and does not define the evidence on which Department is relying in making the allegation that the yarn which they processed and cleared is bulked yarn. Besides the show cause notice invokes Rule 10 but goes beyond the period of one year. Both appellants have raised this issue of time bar before us. 8. Finally, it is urged that the rate of duty in the context of the changed tariff would be nil today and, therefore, under Rule 9A (5) of Central Excise Rules, 1944 the order for demand of duty should be set aside since duty would be payable as per rate and valuation in force on the date of payment of duty. In this connection appellants have cited the following case law ; (i) Fibres Yarn, Other than textured yarn. Eighty-Five rupees per kilogram. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts in with the pattern of Explanation II where, in respect of textured yarn produced out of base yarn falling under tariff item 18 (ii), it has been provided that it shall include bulked yarn and stretch yarn. 12. Coming now to the other arguments of the appellants, it has been exphasised before us that in the process of manufacture of the impugned goods no texturising machine has been used. in this context it is necessary to take note of the fact that the tariff makes it abundantly clear that textured yarn shall include bulked yarn and stretch yarn. As per the records, and the submissions made before us, it has been admitted by the appellants that after the acrylic fibre of different compositions is spun, would, doubled and reeled into hank, form then such yarn is subjected to the processes of steaming and dyeing. These two processes admittedly give the yarn, in the words of the appellants themselves, bulky or fluffy appearance . It is stated that this is result of wetting and steaming. In other words, it is admitted that this yarn is bulky yarn. 13. Appellants have referred to IS 1324-1966 Glossary of Textile Terms Relating to Man-Made Fibre and Fabric Industry to show that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the yarn. It would appear therefore that there would be certain categories of staple yarn which can be considered as high bulk, such as acrylic. When such yarn is subjected to steaming and dyeing then the high shrinkage acrylic fibres contract increasing the bulkiness of the yarn. 15. In view of the foregoing the acrylic yarn which has been subjected to the process of steaming and dyeing has to be treated as bulked yarn. Also in view of the above Explanation in terms of technical authorities referred to above it is to be concluded that so far as the relevant Central Excise Tariff entry is concerned the term bulked yarn appearing therein would have to include bulky yarns. In other words it is not relevant whether texturising machine has or has not been used in the process of such yarn. What is relevant is whether the yarn as such, has the characteristics of bulked yarn. 16. It has been argued before us that bulked yarn is made out of only continuous filament yarn. But as discussed above it is observed that bulked yarn is also made out of staple yarn. 17. Appellant argue that we should go by Trade parlance in deciding whether the impugned product was bulked yarn or not an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of demand is concerned. The claim that the impugned goods had been cleared in accordance with due procedure of law does not effect, the right of the department to demand differential duty at a subsequent time in accordance with Rules. 22. In the case of Modella the period in respect of which the duty has been demanded extends beyond one year. In this case again the Collector has stated that the demand should be restricted to a period of one year but has further clarified that the period should be keeping in view the date of assessment/finalisation of R.T. 12. These Orders are also upheld. 23. In the case of Modella a penalty of Rs. 2000/- has been imposed and it has been argued before us that the Collector in his own order has said that the bona fides of the appellants were not in doubt : In the circumstances, imposition of penalty is not supportable in Law. We find, on the other hand that in this case in his detailed Order the Collector has shown that the appellants had not filed classification list for dyed yarn. In fact, they did not mention whether the yarn was grey or dyed. It is in these circumstances that the Collector has imposed a penalty of Rs. 2000/. Reference to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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