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TMI Blog2010 (4) TMI 519X X X X Extracts X X X X X X X X Extracts X X X X ..... he Respondent. [Order per : Ashok Jindal, Member (J)]. - Appeal No. E/1561/06 is filed by the Revenue against the order of the Commissioner (Appeals) dropping the proceedings against the assessee holding that the activity of padding applying starch, inorganic mineral matters does not amount to manufacture and there is no duty liability. Whereas the Appeal No. 280/06 has been filed by M/s. Amar Processors (P) Ltd. (hereinafter referred to as assessee) against confiscation of the goods classifying the same under CH No. 5207.09 which is to be redeemed on payment of fine of Rs. 12,000/- and payment of appropriate duty along with penalty on the appellant and the partner of the firm. 2. The facts of the case are that on the basis of intell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not impervious to water and loses the stiffness in contact with it. The sample is bleached stiff fabrics, consisting of plain weave, light weight woven fabrics heavily coated with gum, starchy matter and inorganic mineral matter. From the test results, it was revealed that the process of 'Coating' carried out by the appellants amounted to manufacture. As per the provision contained in Notification No. 3/2001-C.E., dated 1-3-2001, cotton fabrics falling under CH No. 52.07 are exempt from payment of duty if they are subjected to the process of padding, calendaring and stentering. The term 'padding' has been defined for the purpose of notification as "Padding, that is to say, applying starch or fatty materials on one or both sides of the fabri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Commissioner (Appeals). Hence, both Revenue and the assessee are in appeal before us. 5. The learned SDR appeared before us for Revenue and submitted that the assessee has claimed exemption of Notification No. 3/2001-C.E., dated 1-3-2001, which exempts various processes carried out on fabrics falling under CH 52.07, 52.08 or 52.09, of which one of the process is padding. The wording of the said notification regarding the process of padding are "Padding, that is to say, applying starch or fatty materials on one or both sides of the fabrics". Thus, it is clear that the process of padding has been defined in the said notification as application of starch or fatty materials on one or both sides of the fabrics. But, in the instant case, si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ince it is the only the padding i.e. the application of natural starch with the aid of power that is a permissible process with the aid of power under the above mentioned Notification and since the Silicate is neither starch nor fatty material mentioned in Sr. No. 10 of the Notification. 6. On the other hand, the learned advocate appearing on behalf of the assessee submitted that the Commissioner (Appeals) has held that the process of padding does not amount to manufacture in terms of Section 2(f)(v), of the Central Excise Act, 1944 there is no question of Central Excise duty. To support his contention, he placed reliance on two decisions of this Tribunal one in the case of CCE, Coimbatore v. M/s. Coimbatore Pioneer Mills as reported in 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise registration. There is no dispute regarding the process of calendaring and stentering. The only dispute is regarding the process of padding of the fabrics. The contention of the Revenue is that padding is to be done by applying starch or fatty material on one or both sides of the fabrics. But, since padding has been done with starch as well as inorganic chemicals for which the assessee is not entitled for exemption. But, we find that the Commissioner (Appeals) while deciding the duty liability has clearly held on the basis of the chemical test reports that the activity of padding by applying gum, starchy material and inorganic mineral matters, the interstics between the yarn are not completely closed and does not make any change in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . M/s. SSM Processing Mills as reported in 2008 (229) E.L.T. 392 (Tri.-Chennai). 11. We are in agreement with the learned advocate that the process of padding undertaken by them with starch along with inorganic mineral matters does not amount to manufacture as the fabrics acquires a quality of stiffness and sheen varnishes after a couple of washes. Such a process which does not bring into existence goods with a new name, property or use, cannot be held to be manufacture. These findings of the Commissioner (Appeals) have not been challenged by the Revenue. The reliance placed by the learned SDR, in the case of M/s. Narsinggirji Mills v. CCE, Pune as reported in 2009 (241) E.L.T. 237 (Tri.-Mumbai) is not relevant in this case as there was n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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