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TMI Blog2017 (1) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... (Technical) Shri J.C. Patel, with Shri D.H. Nadkarni, Advocates for the appellant Shri Ajay Kumar, Jt. Commissioner (AR) for the respondent ORDER Per Ramesh Nair The appellants are engaged in the garnetting of synthetic filament/fibre waste. Excise duty demand was confirmed on the ground that garneting process of waste amounts to manufacture in accordance with Chapter Note 3 of Chapter 55 of Central Excise Tariff Act, 1985. It is the contention of Revenue that synthetic staple fibres or filament yarns carded or combed or otherwise processed for spinning are included as staple fibres inviting classification under Chapter sub-heading No. 55.06. Garnetting and carding process are carried out on such synthetic waste and involve clearing, stretching and cutting of fibre in a determined length so that these process make finished goods capable of being spun into yarn. Against the confirmation of demand in the order-in-original the appellant filed these appeals. 2. Shri J.C.Patel, Learned Counsel for the appellant along with Shri D.H. Nadkarni, Advocate appearing on behalf of the appellant submits that the appellant is engaged in the process of garneting of the sy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8) ELT 424 3. He further submits that the applicant on making an application under RTI received reply from the department that no unit engaged in the process of garneting and carding of waste of synthetic staple fibres of filaments and waste of artificial fibres and filaments falling under the Central Excise Tariff Heading 55.05 is registered under the jurisdiction of this office. This also shows that even the department also not pursuing the demand of duty on similarly placed manufacturers who are engaged in garneting/carding of waste. It is his submission that both the show cause notices involved in the present appeals have been issued beyond the normal period by invoking the proviso to Section 11A. However, from the facts it is clear that even the department was very much aware of the activity of garneting and carding of the appellants. There were chain of correspondence about the registration and dutiability of the said product. Therefore, even the department was of the view that after insertion of Chapter Note 3 under Chapter 55, the process amount to manufacture, then the department could have initiated the action well within the stipulated time period. Therefore, the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 67 as follows:- The process of recovering fibres from hard twisted thread waste, rags, clip pings, etc. especially of wool. The object is to thoroughly break up the material and return it to a fluffy fibrous condition so that it may be re-used in blends or in some cases alone. It is clear from this definition that this process does not involve the emergence of a different commercial commodity with characteristics different from the raw material. The process results only in a re-arrangement of the entangled or twisted mass making it capable of being spun. 9. The process of garnetting is not a manufacturing process. It is a process incidental to spinning of yarn and is basically a part of the spinning process in which the thread waste is processed for opening of fibres to facilitate the spinning process as the tangled mass of threads are likely to damage the carding machine. Therefore, the goods i.e. waste after garnetting are not excisable. 7. From the above decision it was clearly held that the goods i.e. waste after garneting is not excisable as it does not involve emergence of different commercial commodity with characteristics different from the raw materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Excise and Salt Act, 1944. In the case of Gem Spinners (India) Ltd (supra) this Tribunal held that the process of combing of natural fibre as well as waste material, process being merely physical process of segregation and separation of usable materials/fibres from non-usable short of fibres and dirt material does not amount to manufacture. In a similar case of C.T. Cotton yarn Ltd (supra) this Tribunal after remand by the Supreme Court, conclusively held that carding and combing of ginned cotton does not amount to manufacture. Regarding the issue whether the Chapter Note 3 given in Chapter 55 can be sufficient to hold that process of garneting/carding amounts to manufacture, we have gone through the judgment in the case of Gulf Oil Corporation Ltd (supra) wherein it was observed as under: 5. We have considered the submissions of both the sides. Notification No. 63/95-C.E. dated 16-3-1995 exempts all goods, if manufactured in the workshop, situated within the precincts of mines and intended for use in such mines. It has not been disputed by the Revenue that the Appellants are sending ammonium nitrate, diesel oil and emulsion matrix separately to the mine in their mobile v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. In the case of Shyam Oil Cake Ltd (supra) the Hon ble Supreme Court has observed that 23. It was submitted that the decision in Aman Marble Industries case is not laying down the correct law inasmuch as it has not taken note of the amended definition of the term manufacture in Section 2(f). It was submitted that for a process to amount to manufacture it need not be so mentioned only in the Section or Chapter Note and that it could also be so mentioned in the Tariff Item. It is true that the amended definition has not been taken note of. We are in agreement with the submission that under the amended definition, which is an inclusive definition, it is not necessary that only in the Section or Chapter Note it must be specified that a particular process amounts to manufacture. It may be open to so specify even in the Tariff Item. However, either in the Section or Chapter Note or in the Tariff Entry it must be specified that the process amounts to manufacture. Merely setting out a process in the Tariff Entry would not be sufficient. If the process is indicated in the Tariff Entry, without specifying that the same amounts to manufacture, then the indication of the process is mere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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