2013 (9) TMI 170

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....to cotton fabrics processed without the aid of power and steam, subject to certain conditions. 2. The appellant's factory was visited by the Central Excise officers on 13th January 1984 and 18th January 1984. The appellants factory was found to be using steam for the purpose of drying of the processed fabrics. The officers entertained a view that in as much as the appellant was using steam for the drying of the fabrics, the same amounts to use of power in processing the fabrics, as such, the benefit of the notification would not be available to the appellant. They also seized the processed fabrics lying in the factory. 3. It is seen that the seizure of the processed fabrics was challenged by the appellant before the Hon'ble High Court of....

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.... As regards merits of the case she submits that the use of steam is only for drying purpose as is clear from the statement of their partner recorded during investigations. Such drying is after the fabrics are processed and completely manufactured. As such, the process of drying cannot be held to be ancillary to the processed of dyeing so as to consider the same as a part of the manufacturing process. She further clarifies that usually the processed fabrics are dried under the sun and it is only during rainy season that such use of steam is employed for the purpose of drying. By referring to various decisions of the Tribunal, she submits that such use of steam is not use of power in the manufacturing process and as such cannot be held to de....

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....ufacturing the yarn with the aid of power ; and (ii) whether the dyeing of grey yarn to coloured yarn would amount to manufacture under Section 2 (f) of the Central Excises and Salt Act, 1944 as to invite imposition of duty afresh. 8. While answering the above question, Tribunal held as under:- 18. The Tribunal had an occasion, to consider the question of extraction in Order No. 418/83. Taking into account earlier order of the Central Board, the Tribunal has held that the hydro-extraction had resulted in removing the moisture from the fabric and it cannot be said to be a process. No doubt, the order of the Board referred to in that decision was with reference to the Notification 212/77, dated 6/7/1977 and called for a finding whether the....

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.... a manufacturing process. This decision supports our view that drying would not constitute process of manufacture. Hence we hold that the use of hydro-extraction and electrically operated blower cannot be regarded as amounting to manufacture of yarn with the aid of power. 9. The above decision stand subsequently followed by the Tribunal in the case of National Dyers vs. CCE, Nagpur reported in 1996 (85) E.L.T. 83 (Tribunal). 10. In view of the foregoing, we notice that in as much as the use of power in the present case admittedly was for the drying of the processed fabrics, as is clear from the statement of Shri R.R. Bansali, partner of the firm, reproduced below :- After dyeing the fabrics of thin texture e.g. Dosutie cloth and other f....