9911796707
TMI Blog1996 (11) TMI 165X X X X Extracts X X X X X X X X Extracts X X X X ..... on viscose fibres used in the manufacture of cotton viscose blended yarn, looking to the fact and circumstances of the case, it is felt that no penalty shall be imposed on the assessee under Rule 173Q. 2. The facts of the case are that the appellants are engaged in the manufacture of cotton viscose blended yarn where cotton predominates. Their product is classifiable under Chapter Heading 5203 of the Central Excise Tariff. Heading 5203 reads 5203. Cotton yarn including sewing thread, not containing synthetic staple fibres . The appellants were purchasing cotton and viscose stable fibres from the market. Since the duty was being paid on viscose staple fibres, the appellants were availing the credit of inputs duty paid on viscose fibres un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocess was continuous one that what was fed into machine was cotton and viscose stable fibres and that what came out of the machine was viscose cotton yarn. The ld. Counsel submitted that carded or combed cotton at no stage appeared as an independent product at the intermediate stage. He submitted that even if at the intermediate stage something came into existence it was never sold as such by the appellants and therefore the question of payment of duty on combed/carded cotton yarn did not arise. The ld. Counsel therefore prayed Modvat credit was rightly taken by the appellants. 4. Shri Mohamed Ali, ld. JDR for the respondent Commissioner submits that what was being manufactured by the appellants was being classified under Chapter Heading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be rejected. 5. Heard the submissions of both sides. I find that the first issue for determination before me is whether carded/combed cotton comes into existence before spinning of the fibre into yarn. The admitted position in the instant case is that it is blended yarn which finally comes out. However since cotton predominates for the purpose of classification it will be termed cotton yarn. Now the question is as to how this yarn is manufactured ? I find that the appellants have submitted a technical write-up on the process of manufacture of the yarn. It has been stated that there are various stages fibre has to go before being spun into yarn; that the first stage is spinning, the second stage blowing and the third is carding. Now w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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