TaxTMI 
TaxTMI 
2007 (6) TMI 126
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....soft cotton waste. The issue that arises is whether this soft cotton waste attracts Central Excise duty. 3. We may first note the observations of the Hon'ble Supreme Court about the product "According to the appellant, it is a 100% export oriented unit engaged in the manufacture and export of cotton yarn. It purchases cotton from the domestic market for the manufacture of yarn. After the cotton is purchased it is subjected to carding and combing and only thereafter it is spun into yarn. According to the appellant, carding involves opening and separating out of fibres together with effective cleaning and combing is a process by which impurities and undesired short fibres are removed. During carding and combing, the fibre and nails can be s....
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....ased. 4. The ld. Counsel would emphasis that it is two aspects about excisability are well settled. The first being that a mere cleaning and other operations which make a naturally occurring product fit for consumption or preservation would not be a manufacturing activity so as to attract levy of excise. This contention is being raised by relying on the decision of the Hon'ble Supreme Court in the case of Deputy Commissioner, Sales Tax (Law), Board of Revenue (Taxes) v. PIO Food Packers - 1980 (6) E.L.T. 343 (S.C.) wherein the Supreme Court ruled that sliced pineapple is merely a presentation of the fruit in a more convenient form and by reason of being canned it is capable of storage without spoiling. The rule laid down being that "pineap....
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.... of the id. Counsel is that a mere mention of an item in Excise Tariff does not make that item liable to excise duty. The submission is that a pre-requisite for levy of excise is that the item mentioned must be the result of manufacture as well. What is being emphasized is that only an item which is the result of manufacture could attract duty upon being mentioned in the Central Excise Tariff and not otherwise. In this connection, he would also point out that the Hon'ble Supreme Court held in the case of Shyam Oil Cake Ltd. v. Collector of Central Excise - 2004 (174) E.L.T 145 (S.C.) that a mere mention of a process in tariff entry also would not make that a manufacturing process unless it is specifically stated that the named process would....
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.... to be noted that the processes in question are mere physical processes of segregation and separation of usable natural fibres from non-usable short firbre and dirt material. As pointed out by the ld. Counsel, the Hon'ble Supreme Court has ruled in regard to two natural products viz. pinnapple and betel nuts that preparing them for use and marketability, even by the addition to the preservatives and other materials, does not amount to manufacture of new products. The factual situation in the case of the instant cotton waste is even worse. It is not even the result of making natural materials fit for use. That is the case in Arihant Cotsyn since the cotton in question was used for spinning into yarn. In regard to soft waste, the processes ar....