9911796707
TMI Blog1993 (2) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... e the following : 3. The petitioner is a public limited company. It is a spinning mill. Besides spinning the petitioner company has got a separate unit for processing the yarn manufactured at the spinning unit. It is the case of the petitioner that the grey yarn manufactured at the spinning unit was taken for processing into mercerised yarn in the processing unit and the processing unit did not have a separate licence. However, in the year 1977, the Deputy Collector, Central Excise felt that the mercerising unit must possess a separate licence, as the process of mercerising would amount to 'manufacture'. Accordingly, the petitioner applied for and obtained a licence L. 4 No. 1/77 (CYP). Suddenly, the petitioner was informed by the Assist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner. 4. Aggrieved by that, the present writ petition is filed. Mr. T.R. Rajagopalan, learned counsel appearing for the petitioner submitted that the view taken by the respondents viz., that the processing of grey yarn into mercerised yarn will not amount to 'manufacture' is contrary to the definition of 'manufacture' under the Act and consequently the order cancelling the licence cannot be sustained. He also submitted that the provisions mentioned in the order for cancellation of the licence will not help the respondent to sustain the order. He further submitted that having renewed the licence upto 31-12-1990, the cancellation without any valid reason is also not sustainable. In support of his contentions, Mr. T.R. Rajagopalan placed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d is loaded in batches in the processing unit into the mercerising machine where it is treated with caustic soda solution and washed. The yarn thus mercerised is treated with dilute Hydrochloric acid solution to neutralise the residual alkali and it is further treated in a weak solution, of sodium chemicals. Then the 'mercerised' and 'washed' yarn is centrifuged to remove superfluous water. Thereafter, the yarn thus hydroextracted is spread over bamboos and dried by exposure to sun light in the open drying yarn. The dried yarn is then made into bundles and finally packed into bales. 6. The above process of mercerising of yarn according to the Department will not amount to a process of 'manufacture' of cotton yarn as it is not ancillary or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... change in the year 1986 reads as follows: Section 2(f) prior to 1986 "(f) 'manufacture' includes any process incidental or ancillary of a manufactured product; and (i) to (iii).... (iv) In relation to goods comprised in Item No. 18-A of the First Schedule, includes sizing, beaming, warping, wrapping, winding or reeling or any one or more of these processes or the conversion of any form of the said goods into another form of such goods; and the word 'manufacture' shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account; (v) in relation to goods comprised in I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such products shall amount to 'manufacture'. The duty on sized yarn shall be charged on the basis of its weight before sizing. 2. In relation to products of Heading Nos. 52.06 to 52.12 bleaching, mercerising, dyeing, printing, water proofing, shrine proofing,, organdie processing or any other process or any one or more of these processes shall amount to 'manufacture'. From the above the notable and deliberate omission in respect of the Note dealing with yarn is mercerising which finds a place while dealing with fabric. A comparison of the old definition with the new definition of 'manufacture' so far as cotton yarn and cotton fabric are concerned would reveal that there is no appreciable change, but substantially they are the same. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the conditions contained in the licence itself. One of the conditions contained in the licence granted to the petitioner was to the effect that the licence was liable to be. rejected or suspended or the renewal of the same can be refused, if any declaration made or information given in the application therefor is found to be false or if any undertaking given in such application is not carried out. The contention is that the petitioner while applying for licence has declared that he required the licence to manufacture mercerised yarn. As the mercerisation of yarn will not amount to 'manufacture' for the purpose of Central Excise Tariff Act, 1985, the declaration given in the application becomes incorrect, if not false. Therefore the Dep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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