TaxTMI 
TaxTMI 
2003 (3) TMI 105
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....e facts of the case in brief are as follows :- The appellant-firm was issued a licence under the Central Excise Act, 1944 for carrying out the processing work of yarn. According to the appellant, since 22-5-1986, the doubled and/or multifolded yarns falling under Chapter 54 or Chapter 55 of the Schedule to the Central Excise Tariff Act, 1985 were wholly exempted from the duty of excise leviable thereon, provided such doubled or multifolded yarns were manufactured out of yarn falling under Chapter 54 or Chapter 55 of the said Schedule on which appropriate duty of excise had already been paid. Relying upon the aforesaid notifications, the appellant did not pay any duty of excise on the same and neither did it recover such duty of excise from its customers. The Collector of Central Excise issued a show cause notice dated 15-7-1988 to the appellant-firm calling upon the appellant to show cause as to why duty of excise amounting to Rs. 5,63,066.40 be not recovered on the goods, i.e., 'Taspa' yarn/fancy yarn falling under erstwhile Tariff Item No. 62 with effect from 1-3-1986 and under Chapter/tariff sub-heading 56.06 and penalty be not imposed on them under Rule 173Q of the Central E....
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....ts final order dated 22-5-2000, upheld the view taken by it in the case of Pratik Crimpers (supra), which facts and decision are same to the facts of the case of the appellant. 7.We have heard Ms. Meenakshi Arora, learned counsel appearing for the appellant and Mr. M.L. Verma, learned senior counsel appearing for the respondent. 8.We have perused the notifications and orders passed by the Commissioner and the Tribunal and other relevant records. Our attention was drawn to the pleadings and records by the counsel appearing on either side. The points for consideration in these appeals are as to whether there was an error apparent on the face of the record of the judgment dated 15-6-1998 as argued by the learned counsel for the appellant and that whether the Tribunal has erred in holding that the 'Taspa' yarn is classifiable and assessable to duty of excise under Heading No. 56.06. Learned counsel for the appellant submitted that the Board's circulars as well as the fact that there was no core yarn in the disputed goods and hence the same were classifiable between Chapters 50 and 55 of the Central Excise Tariff and that the facts of the appellant were closely comparable to the f....
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....s mandatory and that there being no core yarn in the product manufactured by the appellant, the same is not classifiable under Heading No. 56.06. 9.Per contra, Shri M.L. Verma, learned senior counsel appearing for the respondent, submitted that there is no need to refer to any of the judgments cited by the learned counsel appearing for the appellant inasmuch as the Tribunal while deciding the present case had gone through the manufacturing process as well as the contents of the products which led to the decision for classifying the product under Heading No. 56.06. While in the case of Pratik Crimpers (supra), no such point was discussed and the decision was given simply on the ground that the Tribunal had no means of knowing whether the yarn before them was identical to the yarn before the Tribunal when they gave the cited judgments. He further submitted that the findings of the Tribunal are not at all contrary to the Board's circular dated 19-10-1988 and the Board under the said circular clarified that the instructions applicable to such type of fancy yarn in which there is a core yarn and that the instructions contained in Board's Circular F. No. 55/9/87-CX-1, dated 30-6-1987 ....
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....cified under Heading No. 56.06 of the Central Excise Tariff Act, 1985 without payment of duties of excise leviable thereon, thereby indulging in a large scale evasion of Central Excise duty, the officers of the Headquarters Preventive Wing, Baroda on the directions of the Deputy Collector (Prev.), Central Excise and Custom, Baroda visited by surprise the factory premises of the unit on 29-9-1987 for checks and inquiry. During the course of their visit, the officers found that the unit was carrying out processes of texturising, crimping on man made filament yarn etc. for which the unit had installed one Lohia Magnetic Machine Model No. MT. 466 in their factory premises. The officers further noticed that the unit was manufacturing 'Taspa' yarn, for which the yarns of the different deniers are taken on the aforesaid machine simultaneously; one yarn which is running in lower speed is known as core/base yarn, while the other yarn which is running in higher speed is known as slub yarn, and that the quantity of core yarn and the slub yarn is in the ratio 1:1.5, and that in the manufacturing of the said 'Taspa' yarn the unit had specially attached devices Tensor and ceramic guide in the sa....
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....recorded the statement of Shri Ishwarbhai Durlabhbhai Modi, Manager of M/s. Ishwar Textiles of Surat, who had purchased 20x30 quality 'Taspa' yarn from the unit. He stated that they had purchased yarns only once from the appellant and that the yarn was of the description of 2000 'Taspa' yarn, which consisted of 20 denier Nylon and 30 denier polyester yarn, that the said yarn had slub effect; that the said yarn was used as weft in the manufacture of fabrics; that these fabrics also had slub effect and that the said fabrics were known as 'Taspa' fabrics or fancy fabrics. The statement of Shri Maheshwari v. Mehra, partner of M/s. Shreenath Silk Mills, Udhna, Surat was also recorded. He stated that they had purchased and received Taspa yarn of the quality of 20x30 deniers and that in this yarn two yarns were crimped together - one was Nylon yarn of 20 deniers and the other was polyester yarn of 30 deniers; that the said yarn, which is known in the market as Taspa yarn was having slub effect and that they had used this Taspa yarn of 20x30 quality in the writ in the manufacture of sarees and the product they manufactured was called Taspa fabrics, in view of the test results and the proce....
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....ntral Excise Rules, 1944 by reason of wilful misstatement and suppression of facts with an intent to evade payment of duty. We have perused the reply- submitted by the appellant to the show cause notice to the Collector of Central Excise and Customs, Baroda. In our opinion, the reply submitted by them is not satisfactory. 17.It is, therefore, seen that as per the admission of the appellant, the yarn manufactured by them is special yarn falling under Heading No. 56.06 and hence the notifications mentioned by them are not applicable in this case. They also failed to pay excise duty though they were required to pay duty and hence the action initiated by the preventive wing is correct. It is very clear from the findings of the adjudicating authority as well as the appellate authority that the yarn in question consists of core yarn and hence in view of the above clarification, the said yarn is correctly classifiable under Heading No. 56.06. The contention of the appellant that they had carried out doubling of yarn on simple crimping machine and hence fall under Chapters 50 to 55 is not correct and not acceptable inasmuch as the partner of the said firm in his statement had specifical....