2018 (3) TMI 265

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.... and 55 of the Schedule to the Central Excise Tariff Act, 1985. During the preventive visit to the unit on 23-2-2005, Shri N.K. Maheshwari, President (Works) of the appellant stated that the appellant is engaged in the manufacture of cotton yarn and cotton blended yarn falling under Chapters 52 and 55 of the Central Excise Tariff Act. He further submits that basically there were two units but as per records it was two parts of the unit since the permission for separate EOU stands as applied for. In one part of the unit, they were manufacturing 100% raw white cotton yarn falling under Chapter 52 of the Central Excise Tariff Act and in second part they were manufacturing 100% dyed cotton falling under Chapter 52 of the Central Excise Tariff A....

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....pter 52 and (b) from the manufacturing of cotton blended under Chapter 55. It was the allegation of the Revenue that the above two kinds of waste generated in separate manufacturing process are required to be cleared separately. As waste of cotton yarn does not attract duty and waste of cotton blended yarn attract duty and is classified under Chapter 5505. It was alleged that the appellant has admitted that both processes carried out separately and machines are cleared had changed on every lot. In view of this, the waste generated in two processes are separate and waste generated during the manufacturing blended yarn under Chapter 55 was to be cleared on payment of duty which the appellant failed to do so. In these sets of facts, various sh....

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....pay duty on whole of the waste. The said analogy of the Revenue is not correct. If the case is so, then the Standard Input-Output Norms have to play the role and as per the said the Standard Input-Output Norms, for manufacturing kg of [sic] the acrylic/polyester blended dyed spun yarn, 1.06 kg of acrylic fibre is required whereas in the case of acrylic/polyester blended grey yarn for manufacturing 1 kg of yarn, 1.06 kg of acrylic fibre is required and for manufacturing of 1 kg of combed cotton/melange yarn, 1.40 kg of cotton is required which produced 2 kg of cotton blended yarn. The waste arising therefrom is 400 gms of cotton waste and 60 gms of acrylic waste. In that circumstance also, the cotton is predominating over the acrylic fibre w....