TaxTMI 
TaxTMI 
1998 (7) TMI 647
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....ute, the double/multifold yarn is distinctly dif­ferent, commercially known commodity and in the market such yarns are known as fancy yarn." The ld. Collector, therefore, confirmed the demand of duty of Rs. 4,37,447.62 and imposed a personal penalty of Rs. 25,000/-. Being aggrieved by this order, the assessee has filed the captioned appeal before us. 2. The facts leading to the present appeal are that the Appellants are engaged in the manufacture of PVC Conveyor Belting. For manufacture of the above product, the Appellants purchased cotton yarn and imported nylon yarn and converted the same into nylon multifold yarn, using nylon yarn, nylon and cotton yarn doubly using cotton and nylon yarn and multifold cotton yarn using cotton yarn. Notification No. 318/86, dated 22-5-1986, inter alia, exempted yarn double and multifold falling under Chapter 54 or Chapter 55 of the Schedule from the whole of duty. Notification No. 435/86, dated 6-10-1986 amended Notification No. 318/86, dated 22-5-1986, stipulating thereby the exemption was extended to double/multifold yarn, using cotton yarn and any other yarn of Chapter 54 or Chapter 55. The Department alleged that for the period....
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....n : (a) of 48s counts or more (b) of less than 48s counts. (2) Others Shri Raghavan Iyer contended, with reference to the above tariff entry, that as the entry read 'Woollen yarn, all sorts.........', it included all varieties of woollen yarn such as grey yarn, dyed yarn etc. He therefore contended that the tariff entry itself would make the dyed yarn liable for duty as well as the grey yarn. In this connection, he relied upon the following passage in 'The Law of Central Excise - Taraporevala and Parekh (Second Edition)' "This expression which occurs in item 21(2) was construed as not having the same wide amplitude as is conveyed by the expressions, 'all forms of or 'any form of. Therefore, 'all sorts of food' included all varieties or all kinds of food, that is, it included within its ambit all possible kinds of food but with the basic requirement that the article should be regarded in ordinary parlance as 'food'. (Cadbury Fry v. Union, Kania J.H. Cr. Bom. Misc. Pet. 702/71, dated 1-9-1977)." He further referred us to the notification in question (236/76-Central Excise dated 30-8-1976) and pointed out that it laid down separate rates of duty for gr....
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....g or rope-making." While Webster's New World Dictionary defines it as "Any fibre, as wool, silk, flax, cotton, nylon, etc., spun into strands for weaving, knitting or mak­ing thread." The Supreme Court, after quoting the dictionary meanings, ob­served that the fibre in order to answer the description of 'yarn' in the ordinary commercial sense must have two characteristics: firstly, it should be a spun strand, and secondly, such strand should be primarily meant for use in weaving, knitting or rope-making. Respondent No. 6 in his order in Paragraphs 18 and 19 has made reference to the conditions and has observed that the second condition was satisfied. Respondent No. 6 has not recorded any finding about the first condition. Shri Andhyarujina submits that the twinkling yarn did not satisfy the first condition, that it should be spun and there­fore respondent No. 6 was in error in treating it as a new product being a twinkle yarn. Respondent No. 6 has observed in Paragraph 17 of his order that the weft in question was used for making closely woven fabrics and that indicates that the weft yarn could not be in loose state. According to respondent No. 6, that implies tha....
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...., and the conclusion of respondent No. 6 that by blending the cotton yarn and the nylon yarn a new product has emerged is not correct. 16. In this connection the reliance by Shri Andhyarujina on the decision of the Division Bench of this Court reported in 1980 (6) E.L.T. 249 = 1980 Cen-Cus 256D (Bom) in the case of Garware Nylons Ltd. v. Union of India and Ors. is appropriate. The Division Bench was considering the question as to whether the nylon twine falls under Item 18 or has to be classified under residuary Item 68 for the purpose of excise duty. The Division Bench ob­served that the nylon yarn was covered by Tariff Item 18 and nylon twine is considered as special type of nylon yarn. It is a special type of yarn which is prepared for other purposes, mainly to make it suitable for being utilised in the manufacture of fishing nets and cords. The Division Bench found that by mere application of a special process or giving it a different name would not debar the nylon twine from being considered as a nylon yarn. Shri Andhyarujina submits that respondent No. 6 was in error in assuming that the product of the petitioners was a new product because blending of various yarn....
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....d that the Apex Court in the case of CCE v. Banswara Syntex Ltd. [1996 (88) E.L.T. 645 (S.C.)], in Paras 7 and 8, held - '7. In the present appeal it is contended on behalf of the appellant that the duty was payable when the single ply yarn was manufactured. It is not in dispute that at the stage of the manufacture of the single ply yarn, there comes into existence an excisable item. The respondent manufactures single ply yarn and it is only thereafter, if required by its customers, that the said yarn is doubled or multifolded, as the need arises. Mere doubling or multi-folding of the single yarn which is manufactured does not bring into exis­tence a new product. The single yarn which is manufactured is an excisable item and would be subject to duty upon its manufacture. 8. It is immaterial, in view of Rule 9(1) of the Central Excise Rules and Section 49 of the Act whether the yarn so manufactured is captively consumed or is subjected to any other or further process. Reference may be made to J.K. Spinning and Weaving Mills Ltd. and Anr. v. Union of India and Ors. [1987 (32) E.L.T. 23 (S.C.)] where Rules 9 and 49 of the Central Excise Rules, 1944 after they were amended wi....
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....l submitted that in the Fairchild's Dictionary of Textiles (Sixth Edition), 'Twisting' has been defined as a process of combining two or more parallel single or ply yarns by twisting together to produce a ply-yarn or cord. He submitted that in the Textile Terms and Definitions, given by the Textile Institute in their 9th Edition, Folded yarn, Doubled yarn; piled yarn has been defined as 'A yarn in which two or more single yarns are twisted together in one operation'. He submits that, thus, the use of the word 'Twisting' does not exclude doubling/multifolding. 13. The ld. Counsel submitted that, though it was submitted before the Id. Collector that double/multifold yarn is captively consumed in the appellant's factory and was not marketable, however, no findings have been rendered by the ld. Collector in this regard. He submitted that marketability, according to the decision of the Apex Court in the case of M/s. Porritts & Spencer (Asia) Ltd. v. CCE, New Delhi (supra), is one of the essential criterion for determining whether the product is goods for purposes of levy of excise duty or not; that since this criterion was not satisfied in their case and was specifically taken u....