TaxTMI 
TaxTMI 
1993 (3) TMI 205
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....80 dated 29-9-1982. The appellants argue that their factory at Pune manufactures the crimped yarn in an integrated process. Since this process is one and the same, they contend that the Central Excise duty is chargeable on the yarn after crimping and not first on the flat yarn and then on the crimped yarn as held by the lower authorities. In support of their contention the appellants state that crimping does not tantamount to a process of manufacture in terms of Section 2(f) of the Central Excises and Salt Act, 1944 and therefore their request for levying duty at one stage after the yarn is crimped should be allowed. In support of their arguments, the appellants point out that in the market textured yarn is also known as yarn and not as a d....
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....On the other hand, after crimping the weight of the yarn increases by addition of oil used for crimping and this is to the extent of about 1% of the total weight. Therefore, the appellants' request is in favour of revenue. Shri Berarwalla has also filed copies of the Notifications No. 51/83 dated 1-3-1983 and No. 52/83 dated 1-3-1983 to show that even in the present budget the Government have issued notifications on the lines of Notification No. 55/78 dated 1-3-1978 which would permit collection of duty only at one stage after crimping. Shri Berarwalla has also stated that the Appellate Collector did not appreciate the appellant's arguments that prior to 1-3-1975 there was no distinction under Item 18 under which crimped yarn was covered. H....
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....ed by the appellants is that the texturisation is not a process of manufacture and that the flat yarn is produced and textured in a continuous process in the factory. Examining this contention it is observed that this is not so. The process of producing the flat yarn is different from the process of texturising. As the departmental representative has pointed out, the machine for texturisation is different though the texturisation is done within the same manufacturing premises as those wherein the flat yarn is produced. It cannot be accepted that the textured yarn is produced in an integrated process. In fact, the learned Advocate himself explained the process of texturisation of the yarn in the course of his oral submissions. There is, ther....
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....crimped yarn. The quotations are given separately for each type of yarn and if one were to enquire in the market about the price of flat yarn, one would not be offered crimped yarn or vice versa. Therefore, even on the basis of market criterion, the two types of yarn are known separately, each under a distinctive trade name. It is also seen that in the Central Excise Tariff there are two sub-items under Item 18-II(i) viz. (a) and (b); and when the classification of a commodity falling under one sub-item changes to that under the other sub-item, it tantamounts to a process of manufacture in terms of Section 2(f). Therefore, the conversion of the flat yarn into textured yarn amounts to a process of manufacture. We further observe that the rel....
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....is leviable on the flat yarn before it is removed for the purpose of manufacture of textured yarn. Therefore, the Assistant Collector's order is correct in law. In this view, it is irrelevant whether the procedure as directed in the Assistant Collector's order dated 25-10-1980 is in favour of revenue or against the revenue. What has to be ensured is that the procedure is legal and not beyond the four corners of law. Therefore, even when the Appellate Collector of Central Excise has not dealt with this issue specifically in his order under appeal, it is seen that his order is valid and in accordance with the provisions of law. As regards the submission in the appeal that that Assistant Collector has worked out demands on 0.5% on the total....