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TMI Blog2022 (2) TMI 854X X X X Extracts X X X X X X X X Extracts X X X X ..... re not fully drawn and can be further drawn or stretched. Thus, such yarn has characteristics of POY and accordingly, we find that the findings of the court below is vitiated as they have ignored the test report and have used their personal knowledge, without any cogent materials on record. The amount of ₹ 1.25 Crores, deposited vide challan No.148/1 dated 6.10.1986, pending finalisation of the classification list, shall be treated as duty paid and the appellant shall be entitled to Refund or Credit of the same, as per law - Appeal allowed - decided in favor of appellant. - Excise Appeal No.50148 of 2014 (DB) - FINAL ORDER NO.70068/2022 - Dated:- 9-2-2022 - SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL) AND SHRI P. ANJANI KUMAR, MEMBER (TECHNICAL) Shri Nishant Mishra, Advocate for the appellant. Shri Anupam Kumar Tewari, Authorised Representative for the respondent. ORDER The issue involved in this appeal relates to classification of intermediate goods Nylon/Polyester Filament Yarn, partially oriented yarn (POY)) and the final goods manufactured by the appellants. Admittedly, the appellant was using intermediate goods in the manufacture of the final produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Yarn/37/83-84 dated 22.03.84, discussed above), falling under T.I. 18-II(1)(B) of the Central Excise Tariff as it existed then, seeking approval of the same at Nil rate of duty in terms of Notification No.178/83-CE dated 01.07.1983 in regard to Polyester/Nylon Textured Yarn made out of duty paid filament yarn by describing the product as under:- Sl.No. Continuous Sl.No. of the classification list Description of the product Rate of duty Notification No. 1. 156 Polyester Textured Yarn 220-48-1-Z-1014 220-48-1-Z-1015 Nil 178/83 dt.1.7.83 2. 157 (both made from 756/48/0/1002 other than textured polyester yarn) Nil -do- 3. 158 Nylon Textured Yarn 40-10-1-S-903 Nil -do- 40-10-1-Z-903 Nil -do- 40-10-1-S-913 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant in the said classification list, nor as partially oriented yarn (POY), quashed the provisional assessment granted vide letter C.No.V-18(17) VC/59/84/5090 dated 11.07.84 with rejection of classification list no.Yarn/37/83-84. Further, the Adjudicating Authority also ordered for modification of the classification list no.Yarn/38/83-84 (as the textured yarn classified therein was not found made from duty paid base yarn), with duty of excise on the products declared therein at appropriate rate as per notification no.51/83 dated 1.3.83, denying the benefit of notification no.178/83-CE dated 1.7.1983. The adjudication authority in the said order further directed the appellant to pay differential duty after adjusting the duty already paid, if any, on the yarn cleared along with interest @ 17.5% on the total amount due and also ordered for the encashment of bank guarantees executed by them. 7. Further, with reference to the above said classification order dated 22.04.1987, the jurisdictional Assistant Commissioner vide letter dated 7.5.1987, informed the appellant that the total central excise duty to be recovered on such textured yarn (declared in classification list no.Yarn/38/8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eals), Central Excise, Ghaziabad, seeking condonation of delay under Section 14 of the Limitation Act, 1963, along with application for stay of the impugned order dated 22.04.1987 and the demand issued pursuant thereto dated 7.5.1987. The stay application filed by the appellant was rejected by the Commissioner (Appeals), Central Excise, Ghaziabad vide Order-in-Appeal No. 171-CE/GZB/2012 dated 28.09.2012, due to contradiction in statement of appellant relating to payment of duty. The appeal was dismissed by the Commissioner (Appeals) on the ground that the appellant is seeking condonation for 25 years, whereas he has no power to condone the delay beyond 30 days. 11. Aggrieved with the said order-in-appeal dated 28.09.2012, the appellant preferred an appeal before this Tribunal, New Delhi, which was decided by this Tribunal vide Final Order No.A/55466/2013-EX (DB) dated 01.02.2013, whereby the Tribunal set aside the Order-in-Appeal No.171-CE/GZB/2012 dated 28.09.2012 and given the direction to the Commissioner (Appeals) for fresh decision on the point of limitation as also on the point of pre-deposit of dues, after giving opportunity to the appellant to put forth their case. 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... makes no difference, inasmuch as stretch -ability of POY is dependent on the degree to which it has been stretched (as admitted in para 23 of Order-in-Original).Different qualities of POY will have different stretchability and therefore merely because samples had greater stretchability in comparison to samples tested earlier, cannot be the ground to hold that samples were not yarn. 17. He further urged that the court below has erred in exceeding the jurisdiction vested in them. The findings recorded by the Adjudicating Authority on the specific gravity, tenacity and stretchability, and thus concluding that product in question are filaments at take up stage , are based on the technical evidence. Thus, the Adjudicating Authority, who was not a technical expert, was not competent to record such technical findings. He was bound to rely on the test report given by the experts. On this proposition, he relies on the ruling of the Apex Court in the case of Hindustan Ferodo Ltd. 1997 (89) ELT 16 (SC), wherein it has been held that the technical knowledge of an authority is for better appreciation of records and not for its substitution. Thus, in the facts and circumstances of the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ys for allowing their appeal with consequential benefits in accordance with law. 22. Ld. Authorised Representative for the Department/Revenue reiterates the findings in the impugned order. 23. Having considered the rival contentions, before recording our findings, it is beneficial to take notice of the aforementioned clarificatory circular dated 20.02.2019 with respect to the classification dispute of the POY and textured yarn, which is reproduced below:- According to the Ministry of Law, POY which is imported in raw materials or a base yarn subject to drawing and texturising done simultaneously on draw texturising machines. POY of 86 denierage is texurised into 50 denier and one other quality of POY which when imported is of 150 denier is texturised to 75 denier. This is the final stage when the yarn becomes a marketable commodity known to the textile industry. Therefore, it will be just and legal to make this as excisable and impose the tax at this stage only. For the purpose of security or surety to realise the amount of tax which will be imposed finally, bonds may be taken from the manufacturers or the importers at the point of importation. Classification for the purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It has been mentioned in the referring note that under the Central Excise Law, duty is leviable on goods manufactured in a factory at the time of its removal, whether for captive consumption or for clearance outside. In view of this, it will not be legally in order to collect excise duty on indigenously produced POY on the basis of its finer denierage as in the case of imported POY. We are inclined to agree with this view. Our previous advice to which a reference has been made in the referring note may be treated as having been modified by this note . 5. The Bombay Bench of this Tribunal in its order dated 21st August, 1986 No.ED(BOM) A.155/85 and C.O.(BOM) 15/85, held that POY is an indentifiable item and marketed as such and known as such in the market. It is a good which falls under item 18-II(a)(i) of the Central Excise Tariff. The end use of for both partially oriented yarn as well as fully oriented polyester yarn is for the manufacture of woven and knitted fabrics for apparels. A distinction between partially oriented and fully oriented polyester filament yarn is that, while in the case of fully oriented yarn the same can directly go in for manufacture of woven and kni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... final product viz. Polyester/Nylon textured yarn is nil as provided in notification no.178/83-CE dated 1.7.1983. 25. We further find that as per test report with regard to the samples of classification list no.Yarn/37/83-84, it has been reported that the samples are not fully drawn and can be further drawn or stretched. Thus, such yarn has characteristics of POY and accordingly, we find that the findings of the court below is vitiated as they have ignored the test report and have used their personal knowledge, without any cogent materials on record. 26. Accordingly, in view of our aforementioned findings, which are supported by the Board s Circular dated 20.02.1990, we allow this appeal and set aside the impugned order. The appellant shall be entitled to consequential benefits in accordance with law. 27. We also hold that the amount of ₹ 1.25 Crores, deposited vide challan No.148/1 dated 6.10.1986, pending finalisation of the classification list, shall be treated as duty paid and the appellant shall be entitled to Refund or Credit of the same, as per law, 28. The appeal is allowed in above terms. [Order pronounced on 09.02.2022] - - TaxTMI - TMITax - Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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