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TMI Blog1995 (8) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... respondents herein are engaged in the manufacture of cotton yarn. They were clearing the cotton yarn after doubling the same and were paying duty only at the doubled stage. During the process of doubling of yarn, certain losses occurred and as a result single ply yarn which is an excisable commodity escapes levy of duty to the extent of waste generated in the process of doubling of yarn. The Department was of the view that duty of excise should have been paid at this stage of single ply yarn. Accordingly, the Department issued a demand-cum-show cause notice asking the respondents to show cause as to why the differential should not be recovered from them as the respondents herein were alleged not to have paid duty on the waste that occurred during the process of doubling of yarn. Actually, the demand raised by the Superintendent, Central Excise was for the difference between the duty leviable on the quantity of single ply yarn manufactured and cleared for the purposes of doubling of yarn and the duty actually paid by the respondents herein on the basis of weight of doubled yarn cleared by them. As the respondents did not submit any reply, the Assistant Collector confirmed the deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ull quantity of single ply yarn and its proper accountal was the responsibility of the respondents herein . The learned DR therefore, submitted that the Assistant Collector had correctly confirmed the demand raised. He therefore, prayed that the order of the Assistant Collector may be restored and the impugned order may be set aside. 4. No one appeared for the respondents herein. We, therefore, proceeded to decide the case on the basis of the evidence on record. 5. Heard the submissions of the learned JDR Shri Mohan Lal, perused the relevant case law and the evidence on record. In short, we find that there are two issues in the Appeal which need determination. The first issue is whether the doubling of cotton yarn by cotton yarn amounts to manufacture and the second issue is whether the doubling of cotton yarn by cotton yarn amounts to removal of single ply yarn in terms of the Explanation under Rules 9 and 49 of the Central Excise Rules, 1944. 6. On the first question whether the doubling and multifolding of cotton yarn by cotton yarn amounts to manufacture. The Department cited and relied upon the decision of the Tribunal in the case of Aditya Mills Ltd. We observe that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old yarn shall be determined for purpose of Tariff Item 18 as well as 18A. In fact, single yarn and multifold yarn or doubled yarn are two different varieties of cotton yarn. They are not different commodities either in the CET or commercially. Following the ratio of this decision, we hold that doubling, twisting or multifolding of single ply cotton yarn does not amount to manufacture. 8. In the case of Collector of Central Excise v. Banswara Syntex Ltd. reported in 1992 (62) E.L.T. 658, this Tribunal had held that - Conversion of single ply yarn into double or multifold yarn does not amount to manufacture as no new product having come into existence. For arriving on this decision, the Tribunal considered a number of decisions having divergent views for the sake of convenience, the relevant paragraphs of the decision of the Tribunal are reproduced below : 17. We have considered the submissions of both the sides. We observe that the basic issue involved in this case is as to whether manufacture was complete at the single ply yarn stage and the duty was chargeable as such at this stage on the quantity of single ply yarn removed for making double/multifold yarn or the duty was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd Member. 22. The Third Member s order is now out; and we have perused this Order E/212/92-D, dated 15-5-1992 in Appeal No. E/2261/91-D. It is observed that in this case Ld. Third Member (Shri P.K. Kapoor) has agreed with the order recorded by Ld. Judicial Member (Shri S.L. Peeran) and held that conversion of single ply yarn into double or multifold yarn does not result into any new product. At the same time he has agreed with Ld. Member Shri Peeran that the decision in the case of Bhilwara Spinners is distinguishable. That apart, Ld. Member Shri Peeran has observed inter alia that judicial norms require that the matter should have been referred to a Larger Bench if the Bench in Bhilwara Spinners case desired to take a different view. 23. Since Hon ble Member Technical Shri P.K. Kapoor has stated that he agrees with the order recorded by Member Judicial Shri Peeran, we are of the view that it was no longer necessary to refer the matter to a Larger Bench and we may follow the Tribunal s majority opinion in this matter". Having regard to the different views expressed by different Benches of the Tribunal and their detailed examination in the orders of the Tribunal referred to, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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