Textured yarn processing is not manufacture of filament yarn for concessional excise duty under the notification.

Processing filament yarn or organic polymers into textured yarn did not amount to manufacture of filament yarn under Notification No. 29/2004-CE. The exemption applied to filament yarn procured from outside and subjected to processing by a manufacturer lacking facilities to manufacture filament yarns of Chapter 54, but the appellant's activity was limited to converting purchased material into textured yarn. On those facts, the concessional excise duty benefit was unavailable and the challenge to the tribunal orders failed.

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Issues: Whether processing filament yarn or organic polymers into textured yarn amounted to manufacture of filament yarn for the purpose of availing concessional excise duty under Notification No. 29/2004-CE dated 09.07.2004.

Analysis: The exemption was available to filament yarns procured from outside and subjected to any process by a manufacturer lacking facilities for the manufacture of filament yarns of Chapter 54. On the facts found, the appellant purchased filament yarn or organic polymers and processed them into textured yarn. That activity did not answer the description of manufacture of filament yarn within the notification. The claimed concessional rate was therefore unavailable.

Conclusion: The benefit of concessional excise duty was not admissible and the challenge to the tribunal orders failed.

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