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TMI Blog1993 (4) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... held in para 3.0 as follows - TI 43 CET covered wool tops containing more than 50% by way of wool. However, synthetic tops are not specified as such in any of the specific tariff entries. The appellant contend that blended top are nothing but blended fibre and the Explanation III of TI 18 should be applicable. I am not able to accept the contention of the appellant. Just as wool top is a distinct and separate product, so also is blended top. Since the wool content by weight in such tops is less than 50% TI 43 is not attracted and there being no other specific tariff entry in respect of the blended tops, these would correctly fall under TI 68 CET. The appellant s contention that making of such blended tops does not amount to manufacture is also not well founded. The end-product namely blended tops, obtained by mixing of wool tops and synthetic fibre is a product having distinct characteristics, name and usage than the two constituents which go into the manufacture. In 1983 (14) E.L.T. 1853, it was held by the CEGAT that doubling and twisting of two different yarns amounted to manufacture of a new product and in the event of the new product not falling under any of the specific ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd in wool tops will be different as per the requirements for producing a specific type of yarn, which will be the end-product, the question of sale of the blended yarn generally will not arise, as it is dependent on specific requirements and that even in Indian wool market report published daily does not quote the rate of blended wool as they are not marketable. The Collector has further held that - .. it is quite clear that if intermediate product is not marketable, there is no question of excisability as per the decision of the Appellate Tribunal in the case of Collector of Central Excise v. Amaratara Industries reported in 1988 (37) E.L.T. 152 (Tribunal) and in view of the fact that an article is not liable to excise merely because of its specification in the tariff Schedule unless the goods are known to the market. Marketability is an essential gradient for dutiability as held by the Hon ble Supreme Court in the case of Bhor Industries Ltd. v. Collector of Central Excise reported as 1989 (40) E.L.T. 280 (S.C.). And since there is no marketability, there is no duty of excise. I also find sufficient force in the appellant s contention that when Rule 10 was omitted no actio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a wholesale dealer or another manufacturer who consumes the goods, that by itself is proof of manufacture of goods and thus marketability of goods stands proved. 5. We have heard Shri N.C. Sogani, learned Consultant for the assessee and Mrs. JMS Sundaram, learned SDR for the Revenue. Shri Sogani reiterating the grounds taken up by the assessee in their appeal strongly pleaded that the item is not emerging out of a process of manufacture and that they are not marketed and are not goods. The party had declared the goods in the classification list as `Blended synthetic tops containing less than 50% wool". Notification No. 280/79 dated 30-10-1979 exempted man-made synthetic fibres falling under sub-item 1 of Item 18. The Asstt. Collector had held that the benefit of the said notification cannot be extended to blended tops and therefore, he had classified the goods under TI 68 which has been upheld by the Collector (Appeals). He contended that the item is known in the trade as synthetic top but it is not a new product. He contended that Collector (Appeals) had relied on 1983 (14) E.L.T. 1853 but this ruling is no longer a good law in view of the ruling rendered in the case of Coll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rstood the goods as a different commodity in the market. Relying on these case laws, the learned SDR argued that the assessee who manufactured pure wool tops blended the same with the synthetic wool supplied by their customer and returned the same to them. Hence the new commodity is marketable as it had a new name, character and different use. In this context, she relied on the ruling rendered in the case of Union of India v. Delhi Cloth and General Mills [1977 (1) E.L.T. (J 199)]. She contended that the learned Asstt. Collector had missed this point while accepting the evidence of Srinivasa Murthy. She contended that from the same evidence it could be inferred that a new commodity had emerged by blending of two distinct products. She contended that the ratio of British India Corporation case is not applicable to the facts of this case. She relied on the ruling of the Supreme Court rendered in the case of Bhor Industries v. Collector of Central Excise [1989 (40) E.L.T. 280] wherein it has been clearly held that marketability is not the criteria in a case of intermediate product, but its capability of sale is sufficient to treat it as a separate goods. She also relied on the ruling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had itself issued clarification under old Tariff in Trade Notice Chandigarh No. 146/80 dated 13-12-1980 and had suggested classification of blended top under TI 68. 8. Shri Sogani countering the arguments submitted that the product emerged during the intermediate stage. The assessee had been doing job work and that they had placed evidence about its non-marketability. He has relied on the Supreme Court ruling on Bhor Industries case and submitted that the department had not discharged its burden on classification. However, he admitted on a query from the Bench that the product had a different name, character and use but reiterated that the product is not available in market. Shri Sogani submitted that in the citations relied by the South Regional Bench, the goods were Jombo rolls and pan cakes which had a market and were traded and hence those rulings did not apply to the facts of this case. He submitted that Peramal s case and the rulings of the Gujarat High Court were still binding. 9. The learned SDR countering the arguments of the learned Consultant submitted that the definition of sale in Section 2(h) of the Central Excises and Salt Act, 1944 cannot be lost sight of and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... existence a commercial product. This portion of the evidence has not been controverted by the department and the department has not discharged their burden with any evidence, that the process undertaken by the assessee has resulted in the emergence of a product which can be traded and used as such. In the circumstances the plea of the appellants has to be accepted. In the case of Peramal Spg. and Wvg. Mills Ltd. v. Union of India and Others [1982 (10) E.L.T. 145 (Bom.)] the High Court has held that by merely inter-twining the strands of cotton yarn and nylon yarn does not bring into existence a new product. This ruling is directly applicable to the facts of the case. The ruling given in paras 14 and 15 of the said report is reproduced below - x x x x x The learned D.R. has relied on several rulings and contended that the emerging product is marketable and exigible. However, it is seen that in all these cases, it has been held that a new product has come into existence as there is a change in name, character and use. In the present case, the facts on record are different. Admittedly, product removed by the assessee has still to undergo processes of machining in thei ..... X X X X Extracts X X X X X X X X Extracts X X X X
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