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TMI Blog2004 (11) TMI 169X X X X Extracts X X X X X X X X Extracts X X X X ..... ng under sub-heading 6002.92 and Hosiery goods (Articles of Apparels knitted or crocheted all sorts) falling under sub-heading 6101 of Chapter 60 of CETA. They filed declaration under Rule 173B of the Rules wherein they gave the details of these products. They also disclosed in their declaration that they would be using acrylic fibre, cotton/polyester thread, dyes and chemicals to manufacture piled knitted fabric and detailed the various processes to be undertaken for the production of the goods. 3. Proceedings were initiated against the respondents through a show cause notice dated 22-6-01 for the recovery of the duty in respect of the knitted pile fabric cleared by them during the period in dispute (1988-89 to 2000-2001) on the allegati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , later on they could not claim exemption from payment of duty under the above said notifications. He has also placed reliance on the law laid down by the Apex Court in CCE, Mumbai v. Maharashtra Fur Fabrics Ltd. [2002 (145) E.L.T. 287] and the Circular No. 14/Knitted Fabrics 89/CX I dated 16-10-89 issued by the Ministry of Finance, Department of Revenue, Government of India. 7.On the other hand, the learned Counsel has contended that none of the processes carried out by the respondents on the fabric amounted to manufacture in terms of Note 4 of Chapter 60 of the CETA and that the fabric cleared by them was only unprocessed which was exempt from payment of duty under the notifications in question referred to above. He has also contended t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tic waste/mixed fibre and waste is fed into the carding machine, which opens the compressed material and after loosening the same, sliver is made. (b) Knitting : Thereafter, the carded sliver plus yarn is inserted into the loops of the circular knitting machines and the fabric is made. (c) Shearing : This process is on the back-coating machine where the cloth is sheared, polished and the pile is kept to the required level. (d) Back-coating : The final process is on the back-coating machine where the back coating with the help of chemicals is done and fur is ready. Then, it is measured on semi-automatic measuring table and the rolls are made which are ready for show in Excise Bond room and for sale." But none of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to manufacture and that the fabric was eligible for exemption under Notification No. 109/86-C.E. dated 27-2-86. 12.1The contention of the learned SDR that the processes carried out by the respondents were covered by the words "any other processes" used in Chapter Note 4 to Chapter 60 of the CETA and as such, amounted to manufacture of pile fabric by them, cannot be accepted. The Apex Court in CCE v. Maharashtra Fur Fabric (supra) which has been referred to by the SDR, has interpreted the words "any other process" appearing in the proviso to Notification No. 109/86-C.E., dated 27-2-86 involved in that case, as under :- "It is well settled principle that general terms falling from expression, take their colour and meaning as that of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e pile fabric. Rather, the process of back coating is followed by natural drying as pleaded by the respondents and not proved to be false/incorrect by the Revenue by adducing any evidence. 14.The law laid down in CC v. Maharashtra Fur Fabric (supra) on which the SDR has heavily relied upon, is not attracted to the case in hand. In that case, the assessee was having special type of machine wherein the fabric was put on the pin in the stretch condition to a specific width and subsequently back side of the base fur fabric of the sliver knitted fabric, was coated with acrylic emulsion in the stretched condition and the same was then passed through Hot Air Chamber where the water from the emulsion was evaporated. The Apex Court, under these ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to manufacture. Therefore the same were not dutiable under Notification No. 5/99-CE, dated 28-2-1999 and 6/2000-CE, dated 1-3-2000 during the relevant period. 16. We are fully in agreement with these findings of the Commissioner in the light of the facts and circumstances detailed above and the law laid down in the above referred cases by the Apex Court and the Tribunal. Mere payment of duty earlier on the fabric in question, by the respondents under the belief that the same was dutiable, did not create estopple against them for all times to come, for claiming the benefit of above said notifications, when the processes undertaken by them for manufacturing the fabric did not amount to manufacture in terms of Chapter Note 4 of Chapter 60 o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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