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TMI Blog2009 (4) TMI 188X X X X Extracts X X X X X X X X Extracts X X X X ..... .V. Murthy, Member (T) REPRESENTED BY : Shri V. Sridharan, Advocate, for the Appellant. Shri D.S. Negi, SDR, for the Respondent. [Order per : B.S.V. Murthy, Member (T)]. - M/s. D.N.H. Spinners Limited (hereinafter referred to as the appellants) manufacture Partially Oriented Yarn (POY) from polyester chips (for short PET chips) and Texturised Yarn from such POY. The process of manufacture of POY from PET chips is known as PET POY spinning process from PET chips. 2. In terms of Sl. No. 5A of Notification No. 29/2004-C.E., dated 9-7-2004 as amended by Notification No. 10/2005-C.E., dated 1-3-2005, yarns of Chapter 54 procured from outside and subjected to any process by a manufacturer who does not have the facility in his factory for the manufacture of filament yarn as explained in the explanation given under the description of goods against Sl. No. 5A, are chargeable to duty @ 8% adv.). 3. Apart from the manufacture of POY and texturised yarn as mentioned above, the appellants also buy POY from outside and subject the same to the process of texturising alone in their factory. In respect of this quantity of texturised yarn the appellants claimed concessional rate of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as, polyamides, polyester, polyurethanes or polyvinyl derivatives; or (b) chemical transformation of natural organic polymers (cellulose, casein, proteins or algae), such as, viscose rayon, cellulose acetate, cupro or alginates. 8. From the table given above it can be seen that the concessional rate is available only to filament yarns which are produced by a manufacturer who does not have the facilities in his factory (including plant and equipment) for the manufacture of filament yarns of Chapter 54. The explanation given below the description provides the meaning of the term "manufacture of yarns". The only question to be decided is whether the appellants have facilities for the manufacture of yarns as provided in the explanation. Shri Sridharan in support of his contention that the exemption is available to the appellants submitted that the letter of the Joint Secretary, TRU issued at the time of the introduction of Notification No. 30/2004-C.E., dated 9-7-2004 which had exactly the same explanation had this to say about duty structure on man-made filament yarns. "4.8.1. The duty structure has been completed revised. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expressions of measurement, value, or age. 4 made from. 5 used to show position: north of Watford. 6 Used to show that something belongs to a category: the city of Prague.' I find that appropriate meaning for word 'of' in the explanation is 'made from'. By putting the word 'made from' in place of 'of', I find that as per the said explanation 'manufacture of yarns' means manufacture of filaments made from organic polymers produced by (a) polymerization of organic monomers,-----; or (b) chemical transformation of natural organic polymers------. I further find that process of polymerization of organic monomers: or chemical transformation of natural organic polymers, shown in the explanation, are in respect to organic polymers; not in respect to filaments. The assessee submitted that neither Polymerization process nor chemical transformation process is available in their factory for the manufacture of Filament Yarn; hence they are eligible for the benefit of above said notification. I find that the assessee has either knowingly not correctly understood the meaning of explanation given in the notification or misinterpreted the meaning of explanation of above said notification to avail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, dyeing etc. is another line of activity and after the production of the polymers, the production of yarn starts from the stage of filaments. Therefore, logically as well as based on the letter of the JS (TRU) it can be said that even the intention of the Government does not seem to provide the facility of exemption to assessees similar to the appellants in this case. Another point which supports the view of the department is the main clause in the Notification provides that the concessional rate is available to the assessees who do not have facilities for the manufacture of filament yarns. The explanation provides the meaning of manufacture of yarns and says that manufacture of yarn means manufacture of filaments of organic polymers. It only explains what are organic polymers and how they can be produced but the explanation actually relates to manufacture of yarns. Therefore manufacture of yarns has to mean manufacture of filaments of organic polymers. The Commissioner has relied upon the dictionary meaning to explain how the appropriate meaning for the word "of" in the explanation is made from. We agree with this view taken by the Commissioner. We are unable to accept the conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise department on 18-4-2005 and only thereafter further correspondence was made and department issued the show cause notice. Neither in the show cause notice nor in the Order-in-Original, there is a mention of the correspondence between the department and the assessee. It is the contention of the appellants that they started the process by writing a letter on 18-4-2005 whereas there is no mention of any correspondence anywhere. Even in the Order-in-Original while giving the details of defence submissions there is no discussion about the letters. In any case if the appellants had shown the clearances in ER-1 and had intimated as contended by them that they are availing the benefit of notification in April, 2005, they are clearly not liable to penalty. In any case the issue itself is contentious and the interpretation given by the appellants cannot be considered as perverse or given with a mala fide intention. In view of the above the penalties imposed on the appellants are set aside. In conclusion the Order-in-Original is upheld as regards eligibility of the appellants to the benefit of Notification No. 29/2004-C.E. dated 9-7-2004, penalties are set aside and demand of interest as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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