Calendering versus shrink-proofing: zero zero machine processing without stenter remained exempt calendering, not dutiable shrink-proofing.

Processing cotton fabrics on a zero zero machine without a baby stenter was treated as calendering, not shrink-proofing, because mere shrinkage incidental to calendering does not establish the residual shrinkage or dimensional stability associated with shrink-proofed fabrics. The technical record did not show that the fabrics acquired shrink-proof characteristics, and the later explanatory notification confirmed that such processing remained within the scope of exempted calendering. On that basis, the exemption was available and central excise duty was not attracted. The concurring view stated that the later explanation was clarificatory and made explicit what had already been implicit in the earlier notification.

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Issues: Whether processing cotton fabrics on a zero zero machine without a baby stenter amounted to shrink-proofing so as to attract central excise duty and deny exemption, or whether it remained calendering entitled to exemption under the relevant notifications.

Analysis: The fabrics were processed on zero zero machines without stenter attachment. Calendering by itself was not treated as manufacture, and the relevant tariff entry covered shrink-proofing, not mere shrinkage incidentally occurring during calendering. The evidence did not establish that the fabrics had acquired the residual shrinkage characteristics of shrink-proofed fabrics. The technical material and the board's standard indicated that shrink-proofing depends on residual shrinkage within a low tolerance, whereas the record did not show such proof. In these circumstances, the use of the rubber belt or the machine's other components was not sufficient to treat the process as shrink-proofing. The explanation inserted in the later notification also showed that zero zero machine processing without stenter was within the concept of calendering for exemption purposes.

Conclusion: The process was not shrink-proofing and the assessees were entitled to exemption; duty was not payable on that basis.

Concurring Opinion: K. S. Venkataramani, Member (T), agreed with the result and added that the explanation inserted in Notification No. 213/88-C.E. was clarificatory and merely made explicit what was already implicit in Notification No. 253/82-C.E., so processing on zero zero machines without stenter attachment continued to fall within calendering for exemption purposes.

Ratio Decidendi: Mere shrinkage incidentally occurring during calendering does not amount to shrink-proofing unless the evidence establishes the requisite residual shrinkage and dimensional stability; processing on a zero zero machine without stenter attachment may still fall within exempted calendering.

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