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TMI Blog2001 (3) TMI 442X X X X Extracts X X X X X X X X Extracts X X X X ..... r under letter dated 31-12-1998, filed a declaration on 31-12-1998 giving the details of Hot Air Stenter installed by them; that as the said declaration was not in proper form, the same was filed in proper form on 11-1-1999; that they informed the Superintendent about payment of compounded levy in January and February; that the Commissioner, under Order No. 4/99, dated 26-2-1999 provisionally determined the annual production capacity and the duty liability per month per chamber; that the Superintendent visited their factory on 12-4-1999 alongwith Shri C.B. Gupta, Professor Textile Chemistry, Govt. Textile Institute, and a Panchnama was drawn; that, thereafter, the Commissioner, under Order No. 58/99 dated 2-6-1999 determined their annual capacity of production to be Rs. 375.12 lakhs in terms of value and monthly duty liability to be Rs. 2 lakhs per chamber. 2.2 The learned counsel, further, mentioned that the Central Board of Excise Customs (Board) clarified, under Circular F. No. 354/99/99-TRU dated 16-7-1999, that where the stenters do not have any insulated chambers, determination of the capacity of production would not be possible and the compounded levy scheme could not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oisture to the cotton cloth is provided by steam; that the clips hold the cloth and stretch it during the travel; that the cloth is dried in the second chamber; that because of the steam the fabric is getting moist and because of the heat it is getting dried up and obtained at the delivery end; that the authorities were fully aware of the fact that the insulation was not found inside the machine and Shri Gupta, technical expert, explained that the heaters installed in the machine in front of the blower was drying the cloth which was duly stretched inside the machine. He also contended that reference to I.S. Glossary of Terms does not in any way subscribes to the views of the Commissioner; that Note 1 states that attachment may be by pins or clips; Note 2 indicates the uses to which machines are put to, namely, (a) Drying, (b) Heat setting of thermoplastic materials, and (c) fixation of chemical finish. He mentioned that the Commissioner holds that drying of fabrics, heat setting and fixation of chemical finish should be available for the purpose of extending benefit of compounded levy which is totally out of context as the ISI Glossary indicates that the stenter can be used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re eligible to avail of deemed credit under Notification No. 29/96-C.E. (N.T.), dated 3-9-1996 towards the basic excise duty. 5. Countering the arguments, Shri Mewa Singh, learned S.D.R., submitted that as per Explanation III to Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998, the essential condition for being an independent processor is that he should have the facility in his factory for carrying out heat-setting with the aid of power or steam in a hot air stenter; that under their letter dated 31-12-1998, the Appellants informed the Department that they had installed a Hot Air stenter with two chambers; that on examination, the stenter was found to have no insulation inside, both the ends of it were open through which cloth already dried with the help of Drying Ranges installed in the unit was passing; that this means that the stenter was not used for drying the cloth and in absence of insulation, heat setting of cloth was not possible; that the stenter was being used only for stretching the cloth with the help of a moving chain fitted with clips; that this has been corroborated by the Fitter in his statement which has been endor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facility for drying is sufficient to meet the requirements of the notification. It is thus apparent that the Appellants are not denying that the stenter used by them is not capable of doing heat setting. We have now to examine whether it is capable of drying the fabrics. According to them both the experts have agreed on the point that the machine installed in their factory can do the process of drying. We find from the Panchnama drawn on 12-4-1999 in the presence of expert Shri C.B. Gupta that the steam passed through two tubes/pipes provides the moisture to the cotton cloth. If the cloth is wet and drying process is carried out in the stenter itself, there is no need to moisture the same. It is observed from the said Panchnama that what is being dried in the stenter is the moisture provided from the steam for smoothening the process of stretching. The Panchnama nowhere states that the wet fabrics is being dried in the stenter. On the other hand Shri Hridayanarayan, Fitter, has clearly deposed in his statement dated 3-8-1999, which has not been retracted, that the dried cloth enters from the back hole, and inside the machine it is made lightly wet and later the cloth is a bit drie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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