9911796707
TMI Blog2005 (4) TMI 405X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned goods are marketable and marketed and finally, he has held the impugned goods to be classifiable under sub-heeding 5503.19. He has also given a finding that the appellants were aware of the excisability of the product but had chosen not to file any classification list and hence the extended period of five years under proviso to Section 11A(1) of the Central Excise Act, 1944 is applicable on the ground of suppression. 2. Shri Prakash Shah, learned Advocate appearing for the appellants states that the impugned goods are not excisable in view of Chapter Note 3 to Chapter 55 according to which sub-heading No. 5503.19 applies only to waste arising in or in relation to the manufacture of man made staple fibers. It is his contention that the impugned waste has arisen from the fiber while manufacturing yarn. He also relies on the following two decisions of the Tribunal in support of his contention :- (1) Rajasthan Textile Mills v. Collector of Central Excise, Jaipur - 1999 (105) E.L.T. 317 (Tribunal) (2) Mohan Woollen Mills Ltd. v. CCE, Bangalore-III - 2003 (158) E.L.T. 377 (Tri.-Bang.). He also states that there was an order passed by the Assistant Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cited case laws, we find that the decision in the case of Mohan Woollen Mills Ltd. (supra) relates to soft waste arising in the manufacture of yarn during the course of conversion of blended tops into rowings/slieves and it has been held that the said soft waste is not classifiable under sub-heading No. 5503.19 following the earlier decision of the Tribunal in the case of Rajasthan Textile Mills (supra). We further find that in the case of Rajasthan Textile Mills (supra), it has been held that soft waste arising in the manufacture of yarn from non duty paid fiber at mixing stage to simplex stage is not classifiable under Heading 5503.19. The Bench has based its decision on the fact that the appellants in that case did not manufacture the fiber but only purchased the same for the purpose of manufacture of yarn. The Bench also discarded the HSN Explanatory Notes which states that soft waste is obtained from carding, combing and other process preparatory to spinning of the staple fiber on the ground that the Explanatory Note cannot override the Chapter Note 3 to Chapter 55. 6. We find that the process in the present case which gives rise to the impugned waste is conversion from Tow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation under Sub-heading No. 5503.19. We, however, are of the opinion that the impugned waste arising in the course of conversion of one form of fiber i.e. Tow to another form of fiber i.e. Top is squarely covered under Chapter Note 3 to Chapter 55 and hence classifiable under Sub-heading No. 5503.19. 8. As regards the question of applicability of extended time limit, we find that the Commissioner has given a finding that the statement of Shri Sunilkumar Jain, Manager (Commercial) recorded on 20-11-1994 confirms that the noticee were well aware about excisability of the impugned product but they chose not to file any declaration/classification list and thereby suppressed the fact of production/clearance of the same to the Department. Moreover, even if the appellants were of the view that the impugned goods are not dutiable under sub-heading No. 5503.19 as stated in the statement dated 20-11-1994, still they were required to declare the same to the department. The ground taken that another Assistant Commissioner in a different Division has passed an order in the year 1997 holding the goods to be non-excisable is not a valid ground for the appellants to suppress the fact of product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expected to be aware of fact that in such type of process of conversion of Tow to Tops, emergence of waste is inevitable fact. In spite of that, no action was ever taken either by way of advising the appellant to file the classification list or by issuance of a show cause notice. Apart from the above, it is also seen that there are Tribunal s decision holding that such waste does not fall under Heading 5503 thus contributing to the appellant s belief. The Tribunal in the case of Mohan Woollen Mills Ltd. v. CCE, Bangalore-III- 2003 (158) E.L.T. 377 (Tri-Bang.) has held that soft waste arising in the manufacture of yarn during the course of conversion of blended tops into rowings/slieves is not waste arising in the manufacture of staple fiber and is not classifiable under Heading 5503. Apart from above the Trade Notice No. 19/1990 issued by Aurangabad Commissionerate is also more or less to the same effect, thus, strengthening the appellant s belief that such a waste is not excisable. The order of the Assistant Commissioner relied upon by the appellant passed in 1997 is sufficient ground to hold that if the departmental officer could take a decision to such an effect that waste is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... polymers. Further basis for their plea is the Trade Notice No. 19/1990 issued by the Aurangabad Collectorate clarifying that only waste arising from the stage of spinning from polymers to the stage of obtaining staple fibres would be covered within the description of waste under Tariff Heading 5503.19 and Tribunal s decision in Mohan Woollen Mills Ltd. v. CCE, Bangalore - 2003 (158) E.L.T. 377. 20. I see substance in the above contentions which are met by the learned DR with reference to the order proposed by learned Member (Technical) on classification of soft waste arising during the course of conversion from Tows to Tops under CETA sub-heading 5503.19; with reference to Trade Notice No. 6/90 issued by the Indore Collectorate, which states that waste fibres which are corded, combed or otherwise processed yarn are treated as staple fibres and with reference to admission of Sunilkumar Jain, Manager - Commercial, of the appellants that the soft waste in question was classifiable under Chapter Heading 5503.19 and by highlighting the fact that the appellants did not file a classification list, thus establishing suppression as held by the Hon ble Supreme Court in 2004 (167) E.L.T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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