2001 (2) TMI 627 - AT - Central Excise

Tribunal grants appeal for sewing thread benefits under Notifications 46/86 & 35/95.

The Tribunal allowed the appeal by M/s. Kalpana Thread, holding that benefits under Notifications 46/86 and 35/95 were available for sewing thread wound ... Exemption under Notification 46/86 and Notification 35/95 - winding as a process qualifying for exemption - absence of requirement that yarn must be fit for weaving - precedential application of Sri Ayyappa & Co. decisionExemption under Notification 46/86 and Notification 35/95 - winding as a process qualifying for exemption - absence of requirement that yarn must be fit for weaving - Whether sewing thread wound on cones qualifies for exemption under Notification 46/86 as amended and Notification 35/95. - HELD THAT: - The Tribunal examined the language of the notifications and found no stipulation that the yarn, after undergoing processes such as winding, must be rendered fit for weaving of fabrics in order to attract the exemption. The statutory description includes cotton yarn subjected to weaving, warping, wrapping, winding or reeling (or one or more of these processes) produced out of cotton yarn on which appropriate duty has been paid. Applying a plain reading of the notifications and following the earlier decision in M/s. Sri Ayyappa & Co. v. C.C.E., Coimbatore, the Tribunal concluded that winding is one of the specified processes entitled to the exemption and that no further condition of fitness for weaving is imposed by the notifications. On this basis the Tribunal set aside the impugned order denying the benefit and allowed the appeal.Benefit of Notification 46/86 as amended and Notification 35/95 is available to sewing thread wound on cones; impugned order denying the exemption set aside and appeal allowed.Final Conclusion: Appeal allowed: sewing thread wound on cones is entitled to the exemptions under Notification 46/86 (as amended) and Notification 35/95; impugned order denying benefit set aside in accordance with the Tribunal's reliance on Sri Ayyappa & Co. The appeal filed by M/s. Kalpana Thread was regarding the availability of benefits under Notifications 46/86 and 35/95 for sewing thread wound on cones. The Commissioner denied the benefit, stating it was only for yarn meant for weaving fabrics. The Tribunal, following a previous case, held that the notifications did not require the yarn to be fit for weaving, thus allowing the appeal.