TaxTMI 
TaxTMI 
2005 (7) TMI 650
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....31-5-99 involving demands of an amount of Rs. 4,65,47,453/- and finding that the first notice invoked the extended period of limitation alleging that there was mis-declaration and also proposed to invoke the penal provisions apart from proposing to deny the whole of the credit and not only the difference between 50% and 60% and after considering that the Tribunal vide Order No. 334/99, dated 4-2-99. Had remitted the proceeding initiated vide SCN 6-3-96 to the Assistant Commissioner after setting aside the orders of the lower authorities, leaving the question of manufacture open. Considering that the said question was first to be determined and only thereafter duty liability, the quantum of credit, benefit of notification, etc., would arise. It was held that there is no manufacture, and then nothing further would survive in the matters. He disposed off the proceedings, initiated by the Assistant Commissioner by the Show Cause Notice dated 6-3-96 as also the Show Cause Notice No. V/52/15/91/98-CX, Adjn dated 18-6-98 by the order impugned before us, after holding as follows :- "Since the question of manufacture is to be decided first before proceeding further in the matter and t....
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.... a lasting change or not as per Hon'ble Supreme Court judgment. It is not disputed that the controlled compressive shrinkage that result in the Monforts Machine is irreversible. It is also not disputed that there is shrinkage as per international standards. Commissioner himself observes (para 7.l page 7) that shrinking denotes verity of processes for shrinking fabrics to avoid excessive shrinkage in the garments and that it is known as preshrinking. Thus Commissioner accepts preshrinking as a process, which is done by the manufacturer for shrinking fabrics to avoid excessive shrinkage. It is also a fact that such pre-shrinked fabric is cleared as such. Commissioner at para 18 of the order also accepts that the controlled compressive shrinkage carried out by M/s. K.G. Denim is an irreversible one which means whatever percentage of shrinkage imparted to the fabric is irreversible. Inspite of this fact Commissioner concludes that Controlled Compressive shrinkage (CCS) does not result in a lasting change to the fabric as it can undergo further shrinkage, which does not appear to be correct. 2. According to the Supreme Court judgment, what is required is whether the process impa....
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....on'ble Supreme Court for the process to be treated as "manufacture". 5. The Hon'ble CEGAT in its order dated 4-2-99 observed at para 17 that the Assistant Commissioner has in para 6.2 of the Order-in-Original interpreted the above said affidavit of Shri Veeraraghavan to mean that compressive shrinkage amounts to lasting change and they (Hon'ble CEGAT) cannot subscribe to this conclusion on the basis of the said evidence, particularly in the light of the rest report of the Office of the Deputy Chief Chemist, Madras. In the test report of the Deputy Chief Chemist it has only been stated that the FMDM solution applied on the denim fabric will not have any effect on the fabric other than wetting/damping of the fabric and has not given any opinion regarding CCS. But in the affidavit of Shri Veeraraghavan the shrinkage (Controlled Compressive Shrinkage) achieved by the process performed in the Monforts machine has concluded as lasting. Since the Deputy Chief Chemist and Shri Veeraraghavan have reported in respect of different processes, the observation of the Hon'ble CEGAT that they cannot subscribe to the opinion of the Assistant Commissioner that compressive shrinkage amounts t....
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....chieves shrinkage by "passing the cotton fabric on to a movable elastic felt blanket is released, it assumes shortened condition, and the fabric is forced to conform to this compression as it is hold firmly in contact with the blanket by the drum of a modified Palmer machine". 9. Commissioner has also held that "any prior stages of the processes" enumerated in the chapter note can not be termed as any other processes. This hypothesis is not pertinent to the present case since the controlled compressive shrinkage process is not carried out as an intermediate process by K.G. Denim before achieving shrink proofing and since this CCS process is specific for Denim fabrics and the same is as per International Standards. Further as per Supreme Court's judgment, what is required is that there should be process giving lasting character, and it does not prescribed any condition as made out to be. 10. Commissioner has also observed that since cotton fabric shrinks, when it comes in contact with water, every such shrinkage cannot be termed as resulting in manufacture. This observation of the Commissioner is also not pertinent to the present case since the CCS is not achieved by....
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....neral Manager (Operations) and the description of the Sanforising process as reported in the text 'An introduction to Textile finishing' by J T Marsh - London Chapman and Hall Ltd., publishing - Sixth edition revised) at Pages 248 - 253 etc available before him. He ought to have discussed and connected all the evidences available before him in this de novo adjudication. 14. The Government of India, vide its Notification 4/96, dated 4-3-96, has inserted the Explanation II to Notification 40/95, dated 16-3-95 and thereby has clarified that the exemption under the later Notification will not apply to the products commonly known as 'Denim Fabrics'. In view of the above insertion, KGD are not eligible for the benefit of the Notification 40/95 from the date of issue dated 16-3-95 and hence it is not necessary to disallow the benefit on the grounds that KGD has carried out any other process which is not specified in the Notification in addition to the specified processes, as provided for in the Notification. Further, denim fabrics are not eligible for exemption under the said Notification with effect from 16.3.95 even if subjected to the process specified in the Notification'. Hen....
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....ts and should not have simply dropped the proceedings based on his decision in the de novo proceedings, which does not appear to have any bearing on the proceedings initiated in the above SCNs. 17. The Commissioner, having observed in the subject order that since there is no manufacture involved in what the company does on its Monforts machine, the SCNs mentioned in para 10 and 12 would not survive, has proceeded to decide the issue of deemed credit for the purpose of completion of records. The Commissioner, based on the opinion of experts, held that in the case of shuttleless looms, the yarn used in the edges of the fabric which locks the weft is the selvedge and in this case the monofilament yarns used at both the edges is the selvedge and all other yarns are to be taken as the body of the fabric and hence, on this factual aspect itself the controversy raised in the notice is to be dropped as unsustainable. 18. The case of the dept. is whether the monofilament yarn and polyester yarn used by KGD in the selvedges of the denim fabric should be considered for allowing higher deemed credit under clause (b) of the Notification 29/96 C.E. (N.T.), dated 3-9-96. The para ....
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....and the Commissioner should have decided the same separately on merits. 21. Therefore, it is prayed that the Order-in-Original No. 8/99, dated 13-7-99 passed by the Commissioner, Coimbatore, may be set aside and the following points arising out of the said Order-in-Original may please be determined; 1. Whether after taking into consideration the facts stated above, the order of the Commissioner holding that the alleged process does not amount to manufacture and thereby dropping the proceedings initiated in the SCNs dated 6-3-96 and 22-6-98 is legally correct and proper. 2. Whether by an order passed under Section 35C, the Tribunal should modify/set aside the order passed by the Commissioner or pass such other order as may be deemed fit. 3. After hearing both sides and considering the material on record, it is found - (A) The show cause notices, set aside by the impugned order fall in three categories, as below- (i) Notices on ineligibility to Deemed Credit viz. 29-7-98, 7-9-98, 27-11-98, 13-1-99, 16-3-99 and 31-5-99 answerable to Commissioner. (i....
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....nical Literature, as found by him in following paras, recorded in the Order-in-Original - "28. In any case, the context in which the notification is issued should also be taken into account. But for the deemed credit, if normal credit was extended of the duty paid on the inputs, the company could have got the credit of the duty paid on the monofilament yarn and polyester yarn, as it is not anybody's case that these materials were not used in making the fabric. The argument of the counsel that in interpreting the provisions of the notification issued under Rule 57A (a Modvat provision), a view contrary to the basic provision cannot be canvassed is, in my opinion, well taken. 29. In any case, the need to go into this aspect may not arise if the matter could be resolved on the factual aspect itself. The opinion obtained by the Department is without bringing to notice the factual position that the fabrics are woven on shuttleless looms and not on shuttle looms. Since the difference in identifying the selvedges between the fabrics woven on 'shuttleless' and 'shuttle looms' has not been noticed, this aspect was not considered in taking the opinion. The definition given in....
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....nbsp; (underlining supplied) The finality on the question of dutiability is not reached by any decision qua the Respondents. The question of an operation/activity, being undertaken on certain goods and whether goods emerging consequent thereto, attract the levy under Section 3 of the Central Excise Act, 1944 by considering such operations/activities to be considered within the ambit of 'manufacture' is a question of law, as applied to facts. 'Manufacture' and the questions thereto, cannot be determined by mutual consent as is being made out. That has to be established by applying the law to facts, it goes to the roots of levy under the Central Excise Act, 1944 and can be raised and or tested at any time or stage of a proceeding. Therefore, the Boards order, underlined and emphasized in para 4.16 extracted herein above, to hold the Order-in-Original, in this case, to be not 'legally correct and proper' cannot be accepted and is rejected. (D) The other pleas made in the very said para 4.16 i.e. Regarding the Commissioner ought to have considered and decided the SCN's separately on merits and not on his finding on the decision in the DE NOVO proceedings is considered. It is....
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....t subjected to tension by a steel roller is compacted and shrunk. Finally, the fabric is gently dried in series of steam-heated drums and felt linings. The fabric is taken out and inspected for faults/fabric defects and cut into 100-meter length for dispatch". From this it is evident that the controlled compressive shrinkage is carried out in shrinking section and is not incidental to any other process." The very said operations are recorded in further details in the SCN dated 18-6-98. A reading of the material indicates that after certain cotton fabric is emerging in TWILL weave, singed, beaten, dusted if thereafter passes through an operation/activity undertaken on machines called as MONFORT MACHINES after Dampening with Proprietary solutions, giving what is called as DIMENSIONAL STABILITY to the FABRIC in question. Thereafter such FABRICS could be marketed, for eventual use in manufacture of Garments. These FABRICS referred to by persons dealing with them as JEANS/DENIMS FABRIC in TWILL WEAVE, at this stage, are subject matter of excise levy in this case. (F) Before proceeding further in the quest to determine the exigibility of the entity in view of court's decisions....
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....ess applied to a cotton fabric after construction. These finishes include: Bleaching, Chemicking, Dampening, Drying, Dyeing, Glazing, Calendering, Sizing, Softening, Stiffening, Tentering. Denim : A well known Basic Cotton or Blended Fabric. Right-or-Leftlhand Twill constructions, usually in the latter weave. Generally, the warp is Dyed Blue or Brown with a while filling. The fabric is very durable and is popular for all types of garments From work Clothes to Sportswear and Evening wear. Variation in structural design and coloring has increased the demand for Denim in the fashion fabric field during the 1970's. The term "denim" was derived from the french "Serge De Nimes", a twilled fabric which was made in Nimes, France. A term Synonomous with Denim is "Dungaree". A coarse, blue denim used for work clothes. Originally used for sailors' work clothes. (Emphasis supplied) Gray goods : Knitted or Woven fabrics of all fibres in an unfinished state; after they have been woven and before dyeing or finishing. Also spelled grey, however, gray is more popular. Referred to as Greige goods or in the Greige; pronounced as Beige, the French word for Natural, from which it was cor....
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....orized" is used only as a noun or an adjective. The term "compressive shrinkage" is applied to the process and "compressive shrinkage range" to the equipment used to obtain the results. Sanforized-plus: A standard of wash-and-wear performance. To qualify for this standard, fabrics must pass rigid tests for shrinkage, smoothness after washing, crease recovery, tensile strength, and tear strength. Sanforized-plus 2: A durable press garment trademark that may only be used by licensed garment manufacturers. (ii) Tariff Provisions: Under Chapter 52 for the year 1994-95 (2) In relation to products of heading Nos. 52.06 to 52.12, bleaching, mercerizing, dyeing, printing, water proofing, shrink proofing, organdie processing or any other process or any one or more these processes shall amount to 'manufacture'. Heading No. Sub-heading No. Description or goods 52.07 5207.00 Cotton fabrics (excluding fabrics covered under Heading Nos. 52.09, 52.10 and 52.11) (a) woven on looms other than handlooms and (b) subject to the process of bleaching, mercerizing, dyeing, printing, water-proofing, shrink....
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....e by weight of cotton 5207.10 -Not subjected to any process -Subjected to the process of bleaching, mercerizing, dyeing, printing, water-proofing, shrinkproofing, organdie processing or any other process or any one or more of these processes: 5207.21 ▪ Bleached woven fabrics 5207.22 ▪ Dyed woven fabrics 5207.23 ▪ Printed woven fabrics 5207.29 ▪ Other woven fabrics (G) The issue as to when a 'Gray fabric' would become 'Processed fabric', on application of an operation/activity, has been finally settled by Constitutional Bench of the Apex Court. In the case of Ujagar Prints Etc., v. UOI & Others [1988 (38) E.L.T. 535 (SC)], while upholding the view taken by the Division Bench of the Apex court in the case of Empire Industries Ltd., the Constitutional bench held as follows:- "16. On a consideration of the matter, we are persuaded to think that the view taken in the Empire Industries case that 'Grey-fabric' after they undergo the various processes of bleaching, dyeing, sizing, printing, finishing etc., emerges as a commercially different commodit....
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....vision Bench of Calcutta High Court had to consider this question in the context of Coal Mines (Conservation and Safety) Act, 1952. The objection of the petitioner in that case was that although coal might be a material or a commodity, it was not something which was produced and therefore, the entry which applied to the goods produced in India could not apply to coal. No question of manufacture obviously arose. It was submitted that the coal produced itself. This was rejected. The word 'produced' appearing in entry No. 84 of List I of the Seventh Schedule is used in juxtaposition with the word 'manufactured' according to the Division Bench and used in connection with duty of excise and consequently it would appear to contemplate some expenditure of human skill and labour in bringing the goods concerned into the condition which would attract the duty. It was not required that the goods would be manufactured in the sense that raw material should be used to turn out something altogether different. It would still require that these should be produced in the sense that some human activity and energy should be spent on them and these should be subjected to some processes in order that th....
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....ny process incidental or ancillary to the completion of the manufactured product'. Operations/activities, whatever they may be, would be only incidental or ancillary to the 'woven fabrics', if such process do not transform and bring an entity i.e. such woven fabrics to a stage that they are known in the excise law, that is to say known in the market, to be having a distinct separate identifiable function. If Woven fabrics are understood and used as 'coarse' and/or 'Gray Fabrics' and not understood as 'Processed Fabrics' then any process undertaken, would be process undertaken to be incidental or ancillary to activity of weaving only. The classification of such goods would be as 'Woven Fabrics Unprocessed' only, when the tests prescribed by the law, as laid down by the Constitutional Bench and other decisions of the Apex Court are, applied. (H) Therefore, it has to be examined whether the fabrics, after they emerge from MONFORT MACHINES, in this case, the JEAN/DENIM TWILLS as woven, remain after the impugned operations/activities, JEAN DENIM TWILLS albeit singed, dusted washed calendared with 'Controlled Comprehensive Shrinking' or they become Processed Fabrics. There is no mater....
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....a) for the year 1994-95; 5207.10 for the year 1995-96, 1996-97, 1997-98. (J) Considering the Chapter Note to Chapter 52 of CETA, 1985, which reads as- In 1994-95 as 2. In relation to products of heading No. 52.06 to 52.12, bleaching, mercerizing, dyeing, printing, water proofing, shrink proofing, organdie processing or any other process or any one or more of the process shall amount to 'manufacture'. The learned Sr. Advocate for the Revenue has relied upon para 6 in the case of Maharastra Fur Fabrics, 2002 (145) E.L.T. 287 (S.C.) which reads - "6.......... It follows that the words "or any other process" would have to be understood in the same sense in which, the process, including tentering, would be understood. Thus understood, a process alien to stantering/tentering would fall within the meaning of the proviso could, consequently, the benefit of notification cannot be availed by the respondent". to submit, that the process undertaken as MONFORT Machines and dampening by the Respondents herein on the fabric renders Sanforized standard shrinkage to the textiles and the process though not shrink-proofing would be covered by the Chapter notes to be a process of man....
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....e process undertaken, is not of 'Shrink Proofing,' but it is 'Controlled Comprehensive Shrinkage'. They submit in the grounds of appeal, (para 7 to 12 in this case), as to why the process 'Controlled Comprehensive Shrinkage' (referred by them for brevity as CCS and herein after also as CCS) would not be an intermediate process or process 'at any prior stage of the process' as arrived at by the Commissioner, in the impugned order. The grounds make out, CCS is not achieved by wetting or giving 'part shrinkage;' as observed by Commissioner', but it is as per 'FAIR CHILDS TEXTILE DICTIONARY', submitted that 'Shrink Proof' would not be zero shrink proof cloth, but could be cloth, as in this case, with Residual Shrinkage of 2.5% which experts have assessed to be internationally accepted Sanforizing standards for such fabrics. At the hearing, the material on record that the Sanforizing standards were being targeted and achieved was pointed out from SCN dated 18-6-98. It is also submitted that 'CCS' is not reversible since whatever shrinkage is achieved, it cannot be reverted and is therefore, giving a 'lasting character' to the fabrics, as stipulated by Apex Court in Sidheswari Cotton Mil....
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....meaningless. One cannot say that any process in the direction of shrinkproofing but short of that not amounting to "'shrinkproofing" would be covered by the term "shrinkproofing" that "shrinkproofing" was not done at all. I cannot, therefore, suggest that "shrinkage" achieved in Monfort machines which has not resulted in "shrinkproofing" is covered by the term "any other process". 17. The Learned Counsel for the party rightly argued that the term "any other process" can cover "any process" other than the ones specifically mentioned in the Chapter Note and in any case, cannot cover "any prior stages of the processes" enumerated in Note 3 of Chapter 52. The term "any other" clearly indicate that it should be a process other than the one mentioned before. However, it should have the character of the processes mentioned before, in view of the judgment of the Apex Court. 18. It has also been explained by the counsel that "shrinkage" achieved at various stages of processing are temporary in that the fabric would undergo further shrinkage as opposed to the position that in the case of "shrinkproofing", the object is to ensure that the fabric subjected to "shrinkproofing", ....
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....brics are woven on shuttleless looms and not on shuttle looms. Since the difference in identifying the selvedges between the fabrics woven on 'shuttleless' and 'shuttle looms' has not been noticed, this aspect was not considered in taking the opinion. The definition given in the Textile Terms and Definition clearly brings out this difference". (iv) Considering the above submissions and material along with and the definitions of 'SHRINKAGE' SHRINKAGE CONTROL, SHRINKING, SHRINK PROOFING, SANFORIZED, SANFORIZED PLUS, SANFORIZED PLUS-2' from FINISHING COTTON, ETC. extracted from FAIR CHILDS DICTIONARY herein above, it is apparent that 'Shrinkage Control' could be a process, albeit only of 'Finishing', to facilitate care of the fabrics. It is not mentioned as a 'Process' in 'FINISHING COTTON FABRICS', like the other process of Bleaching, Dyeing as are mentioned in Chapter Note 3. Therefore, if CCS is not understood as a "Process", considering the point made in para 4.2 of the Boards order as follows - "4.2 According to the Supreme Court judgment, what is required is whether the process imparts any lasting change to the fabric. In the present case, the controlled compressive shrink....
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..... The Chapter Note, on a plain reading, permit one or more than one process to be employed, but do not envisage coverage of an incomplete or partial process employed, resulting in incomplete or partially complete results to be covered by it. It has been, therefore, correctly held by the Commissioner that CCS to be not 'shrink proofing' or any other process of 'manufacture' by the Commissioner. The mere fact that the incomplete or partially shrink-proofed fabrics' meet private patented standards of Sanforized, would not enable the process to be termed a complete process, as understood in the Trade or Market, as a 'process' on the fabrics in question to render them 'Processed Fabrics' as against Coarse 'Gray-Fabrics', which the cloth in this case is found and understood. In any case, the private patented Sanforized standards achieved, could not be considered as a process mentioned in Chapter Note. The Tribunal in the case of Ashima, 2003 (159) E.L.T. 771 (Tribunal) = 2003 (108) ECR 430 (Tri), has held that operations of dampening etc. on the very same machine i.e. MONFORT MACHINE, which is not rebutted, was essentially that of Calendering and Shrink Proofing or CCS was not additional....
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....ter' cannot be disturbed. (M) In view of the findings, that the operations/activities carried out on MONFORT MACHINES is only incidental or and ancillary in the resultant manufacture of COARSE GRAY CLOTH known and marketed as JEAN DENIM TWILLS and they do not result in and thus amount to 'manufacture' of New Commercially different entity or transforms the base entity into other goods, and in absence of any material that the entity emerging and marketable are understood as 'processed goods' and the Technical Dictionary giving an understanding of the like goods to be used in COARSE and or GRAY STATE only, there is no case of raising of any demands of duty in the case initiated by Show Cause Notice dated 18-6-98. The dropping of the same as ordered by the Commissioner cannot be found fault with. (N) (i) Board has taken the following point in the Section 35 E(1) order - "4.14: The Government of India, vide its notification 4/96 dated 4-3-96, has inserted the Explanation II to Notification 40/95 dated 16-3-95 and thereby has clarified that the exemption under the later notification will not apply to the products commonly known as 'denim Fabrics'.....
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....he very same process cannot be construed as 'amounting to manufacture' after 16-3-95 or any other date, without an amendment to the definition of "manufacture" in section 2(f) of the Central Excise Act, 1944 or the CHAPTER NOTE to Chapter 52 of the Central Excise Tariff Act, 1985 and or the Schedule annexed. An amendment is seen to have been effected to the same, only by Finance Act of 2001, by which separate heading No. 5207.10 & 5208,10 have been created for "Denim Fabrics" reading as " 'Denim Fabrics', whether or not processed". Therefore, there is, no case to upset the finding of 'no manufacture' as held by Commissioner upto this amendment enactment in the year 2001, or to restrict the same to 1-3-95 as is being made out by Revenue in this appeal. (iii) Once Board accepts the finding of the Commissioner that 'process' does not amount to 'manufacture', that fact cannot change, due to interpretations flowing from notifications amendments as is being urged. (O) (i) Examining further, the plea of the remand order was to Assistant Commissioner in the proceeding remitted by the Tribunal and these should not have been decided or decided on merits by the Collector, it is....
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....e same reasons as mentioned above, this is a mis-appreciation of the evidence on record. (d) The Assistant Commissioner has not analysed as to how in the face of the test report noted above issued by the Office of the Deputy Chief Chemist, he has still held that the process amounts to a lasting change. We also find that in coming to this erroneous conclusion the Assistant Commissioner has depended merely on some write-up of Shri Veeraraghavan of M/s. COMTEC, Surveyors, Valuers and Assessors by profession. 16. In the last Para of this opinion as contained in page-21 of the Paper Book, it has been submitted as follows :- (iv) The process performed on the Monfort machines is for the reasons stated under Section (ii)(a) is only of compressive shrinkage nature and control of residual shrinkage of the fabric and hence it could be stated that the process does not lead to any other lasting changes to the fabric before and after processing. 17. The Assistant Commissioner has in para 6.2 of the Order-in-Original interpreted this to mean that compressive shrinkage amounts to lasting change. We cannot subscribe to this conclusion on the basis ....
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....m is generated merely by agitation and that foam solution has better surface active properties which helps the absorption of moisture/water at faster speed. In other words, since the denim fabrics entering Monforts machine was not desized, the rate of absorption of moisture/water on to the fabric without FMDM solution will be inadequate to enter the rubber blanket. SITRA thus opined that FMDM solution enhances the damping of the fabric in a shorter period of time. 11. The same view has also been expressed by various experts SITRA, Prof. H.T. Deo, NITRA and Shri S.S. Bhandari, which was the view expressed earlier by the Office of the Deputy Chief Chemist, Chennai. 12. The experts have also clearly opined that the application of foam for wetting the fabric done by vacuum foam technique in the Monforts range does not bring about any lasting change to the fabric and it is done to give dampening effect to the denim fabric. It has been categorically opined that it is to be considered as dampening and it is not a lasting change. Further, the opinion of Prof. Dr. H.T. Deo is categorical that "I find that denim fabric has not been subjected to the process of designing either befo....
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....hat is known as 'useless formality theory' observed and laid down - "22........... Thus in relation to cases other than those relating to admitted or indisputable facts, there is considerable divergence of opinion whether an applicant can be compelled to prove that the outcome will be in his favour or he has to prove a 'real likely hood' of success or if he is entitled to relief even if there is a remote chance of success. We may, however, point out that even in cases where the facts are not all admitted or beyond dispute, there is considerable unanimity that the courts can, in exercise of their 'discretion', refuse that Certiorari, Prohibition, Mandamus or Injunction even though natural justice is not followed. We may also state that there is yet another line of cases as in State Bank of Patiala v. S.K. Sharma, (1996) 3 SCC 364, Rajendra Singh v. State of M.P., (1996) 5 SCC 460 that even in relation to statutory provisions, requiring notice, a distinction is to be made between cases where the provision is intended for individual benefit and where a provision is intended to protect public interest. In the former case, it can be waived, while in the case of the latter, it cannot ....
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....ion of mistake Application nor an appeal has been filed by Revenue against their order of Tribunal dated 4-2-99. It has attained finality. The Commissioner has come to his findings on independent material, he could have relied upon this finding of the Tribunal in Respondents own case. He has not done so. Therefore, there is no force in the grounds taken. The grounds amount to an appeal against the order dated 4-2-99 of this Tribunal. This was not the forum to raise the same. Having not challenged the order dated 4-2-99, the grounds taken now do not help the appellants. (iii) Ground No. 6 is an recording of the operations/activities carried out and is not in contest and has been considered. (iv) Ground Nos. 6 to 11 only reiterate the Technical aspects of the shrinkage in fabrics. They do not advance the appellants case to rebut the findings of the Commissioner as regards 'any prior stages of processes, as made out in ground no. 8. Their Hypothesis has been found to be not faulty, along with Commissioner's findings on 'lasting character' which is upheld. The grounds are of no help to the appellant. (v) The ground Nos. 12 and 14....
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....judicated by the Assistant Commissioner of Central Excise, Coonoor Division. As per his order dated 18-3-1996, while finalising the provisional assessment, he held that the process undertaken by the company amounted to 'manufacture' and the benefit of Notification would not be available, and, therefore, the company has to pay duty on the fabrics in question. 10. The company has challenged the above findings before the Commissioner (Appeals) and became unsuccessful. The Commissioner (Appeals) upheld the order of the Assistant Commissioner denying the benefit of Notification but he did not go into the question of 'manufacture'. 11. Aggrieved by the said order, the party has filed an appeal before the Tribunal. The Tribunal has set aside the orders on the ground that the question of 'manufacture' is to be decided and thereafter the question of Notification is to be looked into. The Tribunal, found various infirmities in the order of the Assistant Commissioner. The Tribunal, as per its final order No. 334/99, dated 4-2-99, remanded back to the Assistant Commissioner concerned, for a de novo consideration. While considering the aspect whether the matter to be remanded to....
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.... did not amount to 'manufacture'. 14. I find that there is some force in the argument advanced on behalf of the Revenue on the issue of jurisdiction. I also find force in the argument that weight should be given to the prayer made in the memorandum of appeal, rather than averments in the grounds of appeal. It appears that the Commissioner has proceeded to decide the matter in view of the submissions made by the Counsel for the Respondents and as per the directions of the CBEC that the adjudicating authority who is to decide the matter involving highest revenue is to decide all the cases involving the same questions as to avoid conflicting decisions. He observed that "Though the matter is remanded to the Assistant Commissioner by the Tribunal, the Commissioner, being a superior authority, has jurisdiction to decide the matter". It is settled position now that jurisdiction goes to the root of the matter and it can be raised at any stage. Though the reasoning given by the Commissioner appears to be palatable, it has no sanction under law. When the matter was specifically remanded to the Assistant Commissioner, the Assistant Commissioner is the only proper person to readjudicat....
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....arty amounts to 'manufacturer' or not cannot be decided and determined based upon the wordings of the relevant exemption notifications. It was pleaded on behalf of the assessee that though 'pre-shrunk' has taken place in the process that cannot be construed as an independent process. The Counsel relied upon the decision of the Tribunal in the case of Textile Corporation of Marathwada Ltd. v. CC & CE, Aurangabad reported in 2002 (145) E.L.T. 385 where it is held that with reference to the manufacture of fabrics, used in several processes for manufacture of textile fabrics, duty required to be paid at one stage of processing and not on each process because when more than one process being dealt in the hands of same manufacturer, then instead of each process, the total processing involved is taken as 'manufacture'. On the other hand, relying upon the decision of the Supreme Court in the case of Collector of Central Excise, Bombay v. Maharashtra Fur Fabrics reported in 2002 (145) E.L.T. 287, the Senior Counsel for the Revenue submitted that 'pre-shrunk' which has taken place during the course of manufacture of product in question should be considered as an independent process covered b....
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....rizing, dyeing, printing, water proofing, shrink proofing, organdie processing or any other process or any one or more these processes shall amount to manufacture. 23. The undisputed facts are that the respondents are undertaking the following processes in respect of the fabric is singed to remove/burn any protruding fibres; and is passed through heating/brushing machine to remove any excess fly or dust. The fabric then passes through a foam/vacuum unit where the foam dampens the fabric allowing it to be stretched. The fabric then passes into a shrinking section whereby the use of a thick rubber belt subjected to tension by a steel roller, is compacted and shrunk. Finally, the fabric is gently dried in series of steam heated drums. The fabric is taken out and inspected for faults or fabric defects and out into 100 metre length for dispatch. 24. The adjudicating authority relied upon the following technical expert opinion :- (a) Prof. (Dr.) H.T. Deo. Ph.D. (Tech.), D.Sc. Head, Division of Technology of Fibres and Textile Processing, University Department of Chemical Technology (UDCT), Mumbai. (b) The South Indian ....