Manufacture by power use and Chapter 59 classification turned on flock printing and design-based exclusion from Heading 5907.

Use of electric power in removing excess textile flocks was treated as an integral and necessary stage in completing the product, so the activity fell within manufacture under Section 2(f) of the Central Excise Act, 1944. The classification issue remained open because, if the goods in fact bore a design, Chapter Note 5(c) to Chapter 59 could exclude them from Heading 5907. As that factual and classification question had not been examined by the lower authorities, the matter was remanded for fresh determination after hearing the assessee.

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Issues: Whether the process of flock printing, including removal of excess flocks by an electrostatic device, amounted to manufacture with the aid of power and whether the goods were correctly classifiable under Heading 5907 in view of Chapter Note 5(c) to Chapter 59.

Analysis: The process of removing excess textile flocks was found to be an integral and necessary part of completing the product, and use of electric power for that operation brought the activity within the concept of manufacture under Section 2(f) of the Central Excise Act, 1944. At the same time, it was noticed that the goods bore a design, and if that factual position was correct, Chapter Note 5(c) to Chapter 59 could exclude the product from Heading 5907 altogether. Since this classification point had not been examined by the lower authorities and had been raised for the first time before the Tribunal, a fresh determination was considered necessary.

Conclusion: The matter was remanded to the adjudicating authority for fresh consideration of the classification issue after giving the assessee an opportunity of hearing.

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