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TMI Blog1984 (7) TMI 360X X X X Extracts X X X X X X X X Extracts X X X X ..... gnal No. C. No. V(18-IV) 18-9/81/3451 dated 24-4-1982, also preferred by the party. As common questions of law and facts are involved in all the appeals, they were heard together. The orders-in-appeal were confirmed by the Appellate Collector vide his order No. 305-306 CE/IND/83 dated 25-11-1983. The appellants in 363/84 and 364/84 are referred to as appellants in respect of all these appeals. 2. The appellants Company manufacture Nylon and polyester filament yarn. These products are manufactured in a sophisticated plant in an integrated process of manufacture. The end products, namely, polyester and nylon filament yarn appear only after being drawn or stretched in the Draw Twisting/Texturing Department. During this activity, various s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Department has filed ED(SB) 446/84 questioning the order of the Appellate Collector, Central Excise, New Delhi, and seek a restoration of the order of the Assistant Collector. According to the department, the raw material namely, caprolactum and DMT is fed in a continuous process, chips are formed, which, through an electrically heated extrusion process are drawn through spinnerettes. It is further stretched in the stretching section for manufacture of finished goods. 4. Shri S.N. Kohli stated that the chips are known as such in the market. According to the Chart, Waste Location in Process Flow, caprolactum is fed in the melter. It passes through polycolumn, quench trough, cutter, extraction and dryer stages. The chips are formed and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mer (nylon filament yarn). It is stated therein as follows :- It is only after stretching that the product gets the essential criteria of yarn and can be treated as yarn falling under CET Item 18. Accordingly, any waste which arises upto the stage of stretching cannot be treated as yarn waste which arises after the stretching i.e. in rolling, canning, etc. of the yarn after stretching is a waste of nylon yarn falling under Item No. 18 and will be assessed to the Central Excise Duty. This Trade Notice was subsequently reiterated by the Central Board of Excise Customs vide Tariff Advice No. 21/77 dated 31-3-1977, which reads as follows :- Undrawn waste whether of Nylon or Polyester arising upto the stage of stretching cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his entry has to be read in the light of the general law relating to principles of taxation. The learned Counsel, therefore, submitted that waste arising on and from the stage of stretching (stage No. 11) alone would be liable for duty. 6. Shri K.C. Sachar, JDR, argued that the entire process was uninterrupted and integrated. He stated that the waste arising at all the intermediary stages are being put to use or could be used for re-cycling. He pointed out that no distinction can be drawn between pre-drawn and post-drawn wastes. He drew our attention to the manufacturing process and argued that once DMT caprolactum is melted, the process was carried on in closed pipe lines and thus waste arising at any of the intermediary stages would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacture of polymer chips. The Tariff Entry does not indicate that all the wastes, irrespective of the nature of the industry, would attract duty. Hence, in our view, the Collector (Appeals) rightly held that waste accruing up to the stage of the manufacture of polymer chips would not attract duty under Item 18(IV). 9. We have to consider the waste arising after that stage. The learned Counsel for the appellants argued that the product assumes the characteristics of yarn only from the stage of stretching. We do not accept this contention in regard to waste. The Entry reads in or in relation to the manufacture of yarn . The Process Chart shows that the polymer chips are fed to the Extruder and, after the process of spinning and winding ..... X X X X Extracts X X X X X X X X Extracts X X X X
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