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TMI Blog1988 (6) TMI 203X X X X Extracts X X X X X X X X Extracts X X X X ..... ssistant Collector Central Excise, Patiala approved the classification list 19/79-80 on 20-12-79 allowing the benefit of Notification No. 119/75. However on 18-1 -80, appellants received a letter No. 6(68)30/11 /Val/C/79/457, dated 16-1 -80 from the Assistant Collector, Central Excise, which amended the classification list, cancelling the previous approval 20-12-79 and dis-allowed the benefit of notification No. 119/75 without giving any hearing to the party. It is added that when the benefit of notification No 119/75 was withdrawn, the appellants requested the Asstt. Collector to allow provisional assessment on execution of bank guarantee until the matter was finally settled, but this was refused. Appellant therefore paid the duty, as demanded by the department, under protest, although it was claimed by them that they were liable to pay duty on job charges only. 4. It is observed that show cause notice demanding differential duty was issued to the appellants on 25-3-80, This was replied to on 24 July, 1980 and the Asstt. Collector adjudicated the matter on 4 October, 1980. The learned consultant submits before us that as per decision of the Tribunal in the case of M/s Kiran Spi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Central Excise, Calcutta -1983 9. We have carefully considered the facts of the case arid the submissions made before us, the department has claimed that the point at issue is settled by the decisions of the Tribunal in the cases of General Industrial Society Ltd. v. Collector of Central Excise, Calcutta (supra) and Aditya Mills Ltd. v. Collector of Central Excise, Jaipur (supra). The basic issue before the Tribunal both these cases, we find, was whether doubling and twisting of two different yarns amounted to manufacture of a new product. It was decided that the product obtained as a result of doubling and twisting of two distinct types of yarn, falling under two distinct tariff items, namely, Nylon Filament Yarn and Polyester Spun Yarn, was a new variety known to the market as fancy yarn and that since it did not fall under any of the specific Central Excise Tariff Items 48 II and 48E, it was classifiable under residuary item 68 ibid. It was further held that doubling; and twisting of yam Is manufacture in terms of Section 2(f) of the Central Excises and Salt Act, 1944 an that the duty, although already paid on the yarn which goes into the making of twisted yam, is liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hemical and other properties different from those of the article/article supplied by the customer. 10. In the matter before us, it can be said that there has been a process of manufacture inasmuch as a new product emerges. This new product which is known as fancy yarn, completely different from the basic single yarn from which it is manufactured inasmuch as it has a distinct commercial identity and use. The question now arises whether this product namely fancy yarn can qualify for the benefit of Notification No. 119/75. It does not help us to refer here to the decision of the Tribunal in the National Organic Chemical Industries Ltd. case which involves classification of a chemical. There is no mixing up or reaction of chemicals here. On the other hand we have the benefit of decisions in similar case of twisting of yarn. One such case is that of the Madura Coats Ltd. Decided by the Madras High Court - 1981 ECR 415D in which the Petitioner supplied 3 types of yarn which was twisted to make a single yarn and the Department demanded from the Petitioner duty under Tariff Item No. 68 on the basis that the resultant product was a new product and that the manufacture could not be conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red product. It was added that it would strain credibility to hold that what was being returned was processed chlorine. What was handed over was chlorine and what was returned was a totally different substance, that is, vinyl chloride. 13. The National Organic Chemical Industries Ltd. judgment of this Tribunal therefore does not help to resolve the issue. So far as the matter before us is concerned, there is no chemical reaction involved and it cannot be said that the raw-material has lost its identity. The fact remains, as held in the light of similar facts by the Madras High Court in the case of Madura Coats Limited, that after the twisting job work is effected, the original ingredients can be seen in the final products even with the naked eyes. 14. Respectfully following the ratio of the decision of the Madras High Court in 1981 (ECR) 415D, I allow the appeal. Sd/- (K. Prakash Anand) Member (Technical) 15. [Order per: V.T. Raghavachari, Member (J) and G. Sankaran, Sr. Vice-President] . -I have carefully perused the order prepared by Shri K. Prakash Anand. Since I am unable to agree with his conclusion as to the disposal of the appeal this separate order is being re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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