2016 (1) TMI 1058

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....iability and classification of Polyester Sewing Thread produced by the appellants. 2. The brief facts of the case are that the appellants filed classification list for Polyester Sewing Thread claiming CTH 5504.29 (1994-1995) and CTH 5508.10 (1995-1996). They claimed that Polyester Sewing Thread is not liable to duty as it is a type of cabled/multifolded yarn. The operations of dyeing and winding carried out by them in producing the Polyester Sewing Thread did not amount to manufacture in terms of legal fiction of "manufacture" as per Note 2 of Chapter 55 of the Tariff. 3. Proceedings were initiated against the appellant and the Original Authority held the Polyester Sewing Thread made by the appellants as dutiable. On appeal, the....

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..... She contended that the Polyester Sewing Thread is nothing but multiple yarn dyed and wound in cones and marketed as Polyester Sewing Threads. There is no change in the essential character of the products. The learned AR reiterated the findings in the impugned order and argued that the yarn which is purchased by the appellant undergoes a series of process to reach the marketable stage of Sewing Thread. These processes are irreversible and the resultant Polyester Sewing Thread is having distinct name, character and use and is certainly known in the market as a product of particular name and usage for which the yarn cannot be put into. There is no inter-chargeable usage of these two products, namely yarn and thread, and for excise purpose th....

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....wing Thread is mentioned in the Tariff or there is a deeming fiction of manufacture involved in making such Thread. The point for consideration is that the appellants started with Polyester yarn and produced dyed, rewound Sewing Thread in marketable cones and tubes. The Polyester Sewing Thread is distinctly known in the market and the yarn purchased by the appellant apparently cannot be marketed or used as the Sewing Thread. The Original Authority held that "the only processes adopted by the assessee are dyeing and rewinding of the yarn on cones. Obviously this is not manufactured". How he came to the conclusion that the process does not amount to manufacture is not clear. The learned Commissioner (Appeals) while setting aside the order-in-....