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TMI Blog2016 (12) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... independent processor receiving inputs in form of grey fabrics from one of the merchant manufacturer namely Raymond Ltd and used to undertake the processes as contracted and would return the processed fabrics to Raymond Ltd. It is the case of the Revenue that main appellant has availed deemed credit as per Notification No. 29/96 - CE which is not available as the grey fabrics received from Raymond Ltd was a processed one and had undergone processing of scouring. It is a case of the Revenue that as per explanation to the said Notification, main appellant is ineligible to avail the deemed credit; it is also the case of the Revenue that there is undervaluation of the processed fabrics cleared by the main appellant on payment of duty as they have not included the value/consideration received as additional processing charges. In the first round of litigation, the Tribunal by its order dated 11th March 2003 remanded the matter back to the first appellate authority by observing that the matter needs reconsideration. The impugned order is passed in de novo proceedings holding against the appellant on both the counts. The impugned order confirmed the demands raised along w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icates that any other process will amount to manufacturing activity and since the merchant manufacturer has undertaken scouring activity, appellant is not eligible for the benefit of deemed credit under Notification No. 29/96. He would also draw our attention to the facts of the case that the appellant had not declared the prices of the job charges but had declared the prices of the merchant manufacturer which is not enough. According to him, appellant should have given the entire costing of the transaction with the merchant manufacturer. He would rely upon the decision of the Tribunal in the case of CCE, Mumbai-V vs. Dhanesh Textile Indus. Pvt. Ltd. reported in 2008 (227) ELT 594 for the proposition that every process amounts to manufacture and even scouring is also a process. He would also rely upon the decision of the Hon'ble Supreme Court in the case of Siddhartha Tubes Ltd vs. CCE reported in 2006 (193) ELT 6, for the proposition that every value addition needs to be considered for discharge of duty liability and in the case in hand, appellant had received additional amount from the merchant manufacturer on which duty liability is not discharged. 6. We have consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng within heading No. 51.06, 51.07, 52.05, 52.06, 53.06, 53.07, 53.08, 54.02, 54.03, 54.04, 54.05, 55.09, 55.10, 56.04, 56.05 or 56.06 of the said Schedule(iv) Dyes, chemicals, consumables, packaging materials falling within the said Schedule The following goods manufactured by a manufacturer other than a composite mill, namely :-(i) Processed fabrics falling within Chapter 52 (except sub-heading Nos. 5207.10, 5208.10 and 5209.10) or Chapter 54 (except sub-heading Nos. 5406.10 and 5407.10) or Chapter 55 (except sub-heading Nos. 5511.10, 5512.10, 5513.10 and 5514.10), or fabrics of cotton or man-made fibres, whether or not processed, falling within hea-ding No. 58.06 (except sub-heading No. 5806.20), 60.01 or 60.02 (except sub-heading No. 6002.10) of the said Schedule. 2. The Central Government further declares that - (i) the duty of excise under the Central Excises and Salt Act, 1944 (1 of 1944); (ii) the additional duty under section 3 of the Customs Tariff Act, 1975 (51 of 1975); or (iii) the additional duty of excise under section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978), (hereinafter referred to as declared duty) sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ck allowed under the Customs and Central Excise Duties (Drawback) Rules, 1971, or claims rebate of duty under rule 12, in respect of such duty. 4. The provisions of this notification shall not apply to a manufacturer (other than composite mill) who avails any credit in respect of inputs (other than processed fabrics when received as an input) under any notification issued under sub-rule (1) of rule 57A of the said Rules of 1944. 5. In respect of a composite mill, the provisions of this notification shall apply only to- (i) unprocessed fabrics not woven in the same composite mill and lying in stock as on 4th day of September, 1996; (ii) processed fabrics manufactured from unprocessed fabrics not woven in the same composite mill and lying in stock as on 4th day of September, 1996; (iii) processed fabrics manufactured from unprocessed fabrics not woven in the same composite mill. 6. Where the final products have been removed clandestinely without payment of duty of excise leviable under the Central Excises and Salt Act, 1944 or as the case may be, the additional duty leviable under the Additional Duties of Excise (Goods of Special Importance) Act, 1957, at the time of clearance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns and other constituents, as well as dirt, oil and other impurities. (See also solvent scouring). Note: The treatment varies with the type of fibre." 9. The meaning of scouring as is reproduced hereinabove would mean that it is simplicitor washing of grey fabrics for removing stains with the help of water, solvent does not make the grey fabrics as processed fabrics. The grey fabrics remains grey fabrics after scouring is the ratio of the judgement of the Tribunal in the case of Mansukh Dyeing and Printing Mills (supra). We note that the Chapter Note No. 4 of Chapter 55 relied upon by the departmental representative on the contrary indicates that scouring is not a process. The process is said to be bleaching of the fabric. If the Central Excise Tariff had understood the scouring as a process, definitely the same would have been included in the Chapter notes. To our mind, mere washing of grey fabrics before being delivered to the main appellant for further processing will not amount to a process carried out on the fabric and the said fabrics cannot be called as processed fabrics. In view of this, we hold that appellant is eligible to avail the benefit of Notification N ..... X X X X Extracts X X X X X X X X Extracts X X X X
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