1985 (4) TMI 285

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....n to the delay being condoned. We condoned the delay on the oral application of the Department's Representative. The hearing of the case was then proceeded with. 2. The facts of the case, in brief, are that Item 18A of the Central Excise Tariff read as under :- "18A Cotton yarn, all sorts." There was an Explanation below this item which read as under :- "Explanation. - (1) `Cotton yarn' shall include cotton twist and thread. (2) Cotton yarn, twist or thread, all sorts, whether sized or unsized, in all forms including skeins, hanks, cops, cones, bobbins, pirns, spools, reels, cheeses, balls or on warp beams shall be deemed to be included under this Item. (3) Explanation I, II and III under sub-item III of Item No. 18 sha....

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.... not applicable. The Collector (Appeals) set aside the demand for duty made on the respondents by the Assistant Collector and allowed their appeal. The Department is in appeal against this order of the Collector (Appeals). 3. The Department's plea is two-fold :- (1) `Cone' is included specifically in Explanation (2) below Item 18A and hence it is a dutiable form of cotton yarn. (2) By virtue of the expanded definition of Section 2(f) (winding, reeling, etc. of cotton yarn included in the definition of `manufacture'), doubled yarn or multiple fold yarn was a different commodity from single yarn. Further, by virtue of Rules 9 and 49, as amended in 1982 with retrospective effect, internal removal of cones for manufacture of multiple f....

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....val of cotton yarn on cones for conversion into doubled yarn hanks amounts to removal for manufacture of another commodity and hence the respondents are required to pay the duty at the time of removal of cones. We do not agree with the Department. As made clear in Explanation (2) below Item 18A, bobbins, cones and hanks are all various `forms' of the same commodity, namely, cotton yarn. It is further made clear in Explanation II below Item 18-III, made applicable to Item 18A by virtue of Explanation (3) thereunder, that "cotton yarn" includes both single yarn as well as multiple fold yarn; else, there would be no point in prescribing how the count of multiple fold yarn shall be determined for the purpose of Tariff Item 18 as well as 18A. In....