TaxTMI 
TaxTMI 
2013 (4) TMI 434
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..... Appeal No. Filed by Order-in- Appeal No. Order-in-Original No. Period 1. E/1120/96 Assessee A-17/96 dated 19-1-96 Appeal allowed 67/95 dated 26-6-1995 1-9-1994 to 31-1-1995 2. E/1121/96 -do- -do- 18/95 dated 3-2-1995 Rejection of C.L. 3. E/1122/96 -do- -do- 51/95 dated 23-5-1995 1-8-1994 to 31-8-1994 4. E/1123/96 -do- -do- 64/95 dated 16-6-1995 1-9-1994 to 31-1-1994 5. E/1674/96 -do- A-131/96 dated 30-4-96 Appeal allowed 71/95 dated 11-7-1995 1-8-1994 to 31-8-1994 6. E/1675/96 -do- -do- 108/95 dated 13-11-1995 partly confirmed and balance dropped 1-2-1995 to 15-3-1995 7. E/1676/96 -do- -do- ....
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....ing, winding, beaming, reeling, sizing etc. in their mill. They were issued show cause notices by the jurisdictional Officers on the ground that since the duty is on ad valorem basis from 1-3-1994, the assessee should pay the duty on the value including all expenses incurred by them on account of several processes conducted by them which had attributed to its value upto the date of clearance. It was the contention of the department that the Notification No. 71/94, dated 23-3-1994 and 35/95, dated 16-3-1995 are not applicable to the respondents. Show-cause notices were decided by the Asstt. Commissioner who in 4 cases has confirmed duty and in 3 cases he partly confirmed the duty demand and partly dropped the demand. In the last ....
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....ed that during the period when the process of sizing was amounting to manufacture under Chapters 52 and 55 of the Central Excise Tariff, duty is to be charged on value of sizing of yarn especially when the duty was changed from specific rate to ad valorem rate. He, therefore, submitted that the Commissioner (Appeals) has erred in dropping the demand on activity of sizing which amounted to manufacture under Chapter Note of the Tariff Act. 4. The ld. Advocate appearing for the respondents submitted that the Revenue's contention is that for the products falling under Chapters 52 and 55 sizing amounts to manufacture as sizing is not included in any of the exemption Notification like 71/94, dated 23-3-1994 and 35/95, dated 16-3-1995. He ....
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....sent case. 6. After hearing both sides, we find that in the present appeals, the duty has been demanded on cotton yarn, cellulosic spun yarn, non-cellulosic spun yarn for the period 1-8-1994 to 31-8-1995. Prior to 1-3-1994, the duty on the yarn was at specific rate and with effect from 1-3-1994 the duty was charged to ad valorem rates. It is the contention of the Revenue that the process of sizing amounted to manufacture and duty is required to be paid by them on the value of sized yarn during the disputed period. 7. We find that Chapter Note 1 of Chapter 52 reads as under (prior to amendment in 1995) :- "In relation to products of heading Nos. 52.03 and 52.04, sizing, beaming, warping, wrapping, winding or reeling, or an....
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....ced out of duty paid yarn. On going through these Notifications, we find that out of the activities referred to in Chapter Note 1 of Chapter 52, all the processes are exempted except the process of sizing. That means that sizing was not covered under the exemption Notification No. 46/86 as amended by Notification No. 71/94 prior to 26-5-1995 in respect of cotton yarn. 8. With effect from 26-5-1995 Chapter Note 1 of Chapter 52 was changed as under : - "In relation to products of heading Nos. 52.04, 52.05 and 52.06, the process of dyeing, printing, bleaching, mercerizing, twisting, texturising, doubling, multiple-folding, cabling or any other process or any one or more of these processes, or the conversion of any form of the said p....
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....5. Since the processes (except sizing) were exempted from duty, demanding duty on value of yarn falling under Chapters 52 and 55 of Tariff on account of these processes (except sizing) is not sustainable as held by the Tribunal in the case of Maheswari Cotton Mills (supra). 9. Now coming to the activity of sizing, we find that sizing is not covered under any of the Notifications prevailing during the period of dispute in these appeals i.e. Notification No. 46/86, dated 1-3-86, Notification No. 71/94, dated 23-3-1994 and Notification No. 35/95, dated 16-3-1995. Therefore, duty is liable to be paid on the value of sized yarn by the appellants during the relevant period. Similar view was taken by the Tribunal in the case of Mafatlal In....