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TMI Blog1989 (6) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... ntemplated to be undertaken by the appellant Company, such process being the following : (a) thermo-plastic polyester chips are fed to the hopper; (b) from the hopper, the chips are fed to the extruder where these are melted and forwarded to the extrusion system; (c) extruded continuous filament is obtained; (d) such filament is then subjected to stretching process; (e) stretched filament is known as used as yarn. Accordingly, Central Excise L4 Licence for Thermoplastic filament yarn was granted on 21-9-1985. As the Company could not instal the plant for undertaking the process of stretching due to financial difficulties, it addressed to the jurisdictional Superintendent of Central Excise on 29-4-1985 making it known that the extruded filament for being marketed was to be applied with finishing oil and then would on paper tubes. On 23-5-1985 a sample of the said goods was forwarded to the Chemical Examiner who has given his report on 2-8-1985 as follows : The sample is in the form of hanks of lustures, white filaments made entirely of Polyester. The filaments are not drawn (attenuated) and are being capable to be stretched further for subsequent processes. The draw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for designs/patterns in different textile application after processing on stretching machine. They submitted that they do not have any printed literature on that product. However, they submitted a copy of IS 1324-1966 defining yarn and then filament and also enclosed a copy of the invoice. On 29-1-1986, the appellant-Company was informed that its product was to be classified under Item No. 18II(i)(a) and the duty should be paid accordingly on the clearances till date. The request of the appellant Company on 13-1-1986 for clearances being allowed provisionally under Rule 9B was rejected. 6. Personal hearing was granted to the appellant - Company on 21-2-1986 and the Assistant Collector passed the order-in-original No. 9/1986-Val./C.No.V(68)17/90/85, dated 28-2-1986/3-3-1986, holding that the subject-goods were classifiable under Tariff Item No.l8II(i)(a) as polyester filament yarn. 7. Being aggrieved by this order, the appellant, preferred an appeal before the Collector (Appeals), Central Excise, New Delhi; bearing appeal No. 74-CE/APPL/-JPR/86 on 27-3-1986. The said appeal assailed the Assistant Collector s order on the following grounds :- (i) for relying on the descriptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingly, the appeal was fixed for hearing on 12-5-1988. 10. The Collector (Appeals) Central Excise, New Delhi passed the impugned order on 9-6-1988 rejecting the appeals and confirming the order of the Assistant Collector. It is against this composite order that the present appeals have been filed before this Tribunal. 11. Shri N.C. Jain, the learned Counsel for the appellant contended before us that as the appellant could not install the machinery for manufacture of yarn due to unavoidable circumstances, the appellant-Company made the position known to the department on 29-4-1985 and it informed the Superintendent of Central Excise that the goods manufactured is an article of plastic under Tariff Item 15A(2) attracting Notification No. 149/82-CE, dated 22-4-1982 which exempts fully the payment of Central Excise duty. He contends that the relevant goods cannot assume the character of yarn and in support of his arguments he placed reliance on an extract from page 517 of Text Book of Polymer Science by Fred W. Billmeyer, Jr. The filaments as spun are almost completely unoriented. Most of the stretching that occurs between the spinneret and windup does so while the filament is st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oard s letter F.No. 50/7/74 CX-2, dated 31-19-1975 which reads as follows :- He (the Chief Chemist) held the view that yarn/fibres which had undergone stretching would stand classified under T.I.No. 18 and the unstretched yarn would fall outside the purview of Item 18 and similarly its wastes. 13. Shri Jain refers to the decision reported in 1978 (2) E.L.T. 180. - Union Carbide Co. Ltd. v. Assistant Collector of Central Excise Others - for the proposition that acceptance of words in trade and their popular meaning should be taken as their meaning. In paragraph 13 of the above cited decision, at page 184, it was held that when an item of goods is specified by the Indian Standard Institution, that is certainly evidence of the fact that the said item is known as such in trade or commerce. The next citation placed before us is the decision in Union of India and Others v. Delhi Cloth and General Mills Co. Ltd. Others - 1977 (1) E.L.T. 199.In this case three different companies manufacturing vegetable product known as Vanaspati challenged the legality of the imposition of excise duty on what was called by the taxing authorities, processing of refined oil from raw oil. At para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot used, but only textured yarn" falling under Item 18II(i)(b) has been explained as including stretch yarn. He submits that in the cases cited by the learned Counsel for the appellant, only cellulosic yarn was dealt with and not filament yarn. He submits that the goods in question in this case are continuous filament yarn and even the Collector (Appeals) refers to continuous filament yarn in his order. Shri Chakraborthy further contends that the goods are in final saleable form because they are spun at high speed and they become partially oriented yarn (POY), He argues that there is no further treatment of stretching or drawing as in the process of spinning at high speed. The filament is stretched by air drags and not stretched on machine. Regarding the Chemical Examiner s report the learned JDR refers to the words Filaments are not drawn and are being capable to be stretched further for subsequent process to mean that there has been some stretching. 16. The learned JDR also attacks the Chemical Examiner s report on the ground that the Chemical Examiner is biased by the Indian Standard Specification which does not refer to stretching or drawing. The Chemical Examiner speaks o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the most significant commercial advancement has been the development of high speed spinning processes that yield partially oriented yarn (POY), which is the preferred feed-stock for subsequent drawtexturing... What is drawing has been defined in page 389 as Drawing is the stretching of fibres of low molecular orientation to several times their original length . 17. The learned JDR contends that there is no estoppel in this case merely by virtue of correspondence between the Superintendent and the assessee, when the classification in question has been decided by the Assistant Collector, who is the competent authority. He relies upon the order in Excise Appeal No. 465/88-A C.C.E., Bombay v. Wipro Information Technology Ltd. 18. Regarding the Indian Standard Specification the learned JDR submits that the Indian Standard Specification cannot be relied upon for the reason that it is of the year 1964 and, therefore, out-dated in the context of new technology prevalent in India and this is relied upon only for quality control and not for classification. He stresses that when the Indian Standard Specification tabulates nomenclature then it will be of greater value. 19. Regardin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -10-1985, there is no reason for concluding that the goods are yarn when the Department itself accepts that the goods are in the undrawn stage. Regarding the arguments on waste, Shri Jain submits that if his contention that the goods are not yarn is accepted, then the demand for duty on waste will also fail and it will go under Tariff Item 68 of the Central Excise Tariff. 22. We see great force in the objections of Shri N.C. Jain that the argument that the goods are POY is a new point urged for the first time before the Tribunal. It was never the case of the Department earlier that the goods in question are POY. We also see great force in his contention that if the Chemical Examiner s report, invoice description and I.S. Specification are to be ignored, there is no material for the Department to rely upon to come to the conclusion that the goods are yarn . 23. We have carefully considered the submissions of both the sides. The Chemical Examiner s report dated 2-8-1985 clearly states that the filaments are undrawn and that they are capable of being stretched for subsequent processes. He has further opined that as the filaments are in the undrawn stage, they may not satisfy the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied by the I.I.T. Professor in the present case, it obviously does not satisfy the definition of filament yarn according to the Indian Standard. It is well settled that for the purpose of understanding how expressions are understood in trade, commerce and industry, the definitions of expressions published by the Indian Standards Institution is a good guide (See Supreme Court judgment in Union of India v. Delhi Cloth and General Mills - 1977 (1) E.L.T. (J 199) reiterated recently in Collector of Central Excise, Kanpur v. Krishna Carbon Paper Co. - 1988 (37) E.L.T. 480 (SC). It has also to be noted that the Department on its part has not produced any evidence to rebut the evidence in the shape of the IIT Professor s Certificate. The report of the Chemical Examiner does not support the case of the Revenue. 24. Reliance has been placed by the DR on certain passages in the book Textiles : Fibre to Fabric , Fifth Edition by Dr. Bernard P. Corbman. This talks of production of filaments without attenuating after they emerge from the spinnerette thereby producing undrawn yarn; further that since the fibre is not subjected to any significant linear orientation, it must be specially handl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Examiner s report. 27. The book Textbook of Polymer Science by Fred W. Billmeyer, Jr., published by John Wiley and Sons, relied upon by the appellants states that the filaments as spun are almost completely unoriented. Most of the stretching that occurs between the spinnerette and windup does so while the filament is still molten, and there is sufficient time for molecular orientation to relax before the fibre cools and crystallizes. Consequently, a separate drawing step is necessary to produce the orientation of the crystallites necessary for optimum physical properties. This shows that the extruded filaments have to be subjected to a separate process of drawing. As we have seen, the appellants claim that they did not have the machinery necessary for stretching the extruded filaments, has not been investigated or rebutted by the Department and the Chemical Examiner s report shows that the product manufactured by the appellants is undrawn filaments. Though the circulars, tariff advices etc., issued by the Central Board of Excise and Customs would not constitute authorities in the matter of classification, it is of significance to note that the Board also had, on examination o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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