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TMI Blog2007 (6) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... ned cotton, processes the said cotton into spinnable fibre and spins the fibres into yarn. During the processing of ginned cotton into fibres, certain amount of cotton goes waste. Such waste is referred to as soft cotton waste. The issue that arises is whether this soft cotton waste attracts Central Excise duty. 3. We may first note the observations of the Hon'ble Supreme Court about the product "According to the appellant, it is a 100% export oriented unit engaged in the manufacture and export of cotton yarn. It purchases cotton from the domestic market for the manufacture of yarn. After the cotton is purchased it is subjected to carding and combing and only thereafter it is spun into yarn. According to the appellant, carding involve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that, in any case) soft waste cannot be called a manufactured product, since it is the same item as ginned cotton, though with greater concentration of waste materials than the bales in which ginned cotton is purchased. 4. The ld. Counsel would emphasis that it is two aspects about excisability are well settled. The first being that a mere cleaning and other operations which make a naturally occurring product fit for consumption or preservation would not be a manufacturing activity so as to attract levy of excise. This contention is being raised by relying on the decision of the Hon'ble Supreme Court in the case of Deputy Commissioner, Sales Tax (Law), Board of Revenue (Taxes) v. PIO Food Packers - 1980 (6) E.L.T. 343 (S.C.) wherein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f human beings is to produce superior products by treatment or manipulation. He would highlight the ruling of the Court that there is no transformation in the case of waste/scrap into a new and different article. 5. A further contention of the id. Counsel is that a mere mention of an item in Excise Tariff does not make that item liable to excise duty. The submission is that a pre-requisite for levy of excise is that the item mentioned must be the result of manufacture as well. What is being emphasized is that only an item which is the result of manufacture could attract duty upon being mentioned in the Central Excise Tariff and not otherwise. In this connection, he would also point out that the Hon'ble Supreme Court held in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sses. It is an amalgam of waste (dust etc.) materials as well as short fibres. Thus, the item is a combination of natural fibre as well as waste materials. The issue as to whether manufacture is involved is to be decided in this context and the processes involved. It ought to be noted that the processes in question are mere physical processes of segregation and separation of usable natural fibres from non-usable short firbre and dirt material. As pointed out by the ld. Counsel, the Hon'ble Supreme Court has ruled in regard to two natural products viz. pinnapple and betel nuts that preparing them for use and marketability, even by the addition to the preservatives and other materials, does not amount to manufacture of new products. The factu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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