TaxTMI 
TaxTMI 
2004 (10) TMI 128
X X X X Extracts X X X X
X X X X Extracts X X X X
....ns in the halls for drying the fabrics, using motor for drawing water for use in the factory and using power for stirring of chemicals; that the Commissioner, under the impugned order has confirmed the demand of duty for the period June, 1994 to May, 1999 and has imposed equal amount of penalty. 3.The learned Advocate submitted that the Appellants had availed of the benefit of Notification No. 28/94-C.E., dated 1-3-1994, Notification No. 8/96-C.E., dated 23-7-1996, Notification No. 4/97-C.E., dated 1-3-1997 (Serial No. 85), 5/98-C.E., dated 2-6-1998 (Sl. No. 106) and 5/99-C.E., dated 1-3-1999 (Sl. No. 102); that all these Notifications granted exemption to the cotton fabrics processed without the aid of power or steam; that they were undertaking the activities of bleaching, mercerizing, dyeing, printing, washing, drying and finishing before the fabrics were actually packed and cleared; that in respect of these processes, they had not used any power. He mentioned that the Larger Bench of the Tribunal in the case of Mathania Fabrics v. CCE, Jaipur [2002 (142) E.L.T. 49 (T - LB)] has held that it can not be claimed that power is not used in the processing of fabrics "when power is us....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cation was issued to remove ambiguity in the earlier Notification. He also mentioned that as there was dispute as to whether use of power for lifting of chemicals to overhead tanks and for stirring dyes etc. would mean use of power in the processing of fabrics, the Notification No. 5/99 was amended and the point of dispute was clarified. He relied upon the decision in the case of Central Machine Tool Institute v. CC, Bangalore, 2000 (124) E.L.T. 231 (T) wherein the Tribunal has held that amending Notification, being clarificatory in nature, making explicit what was implicit and to remove the ambiguity in the earlier Notification, shall have the effect from the date of the original Notification. Reliance has also been placed on the decision in the case of Rochi Ram & Sons v. CCE [2004 (166) E.L.T. 203 (T) = 2004 (93) ECC 78 (T)] wherein it was held that the amendment carried out to Notification No. 1/64-Cus., dated 18-1-1964 by Notification No. 61/2000-Cus., dated 10-10-2000 was clarificatory since it was introduced after representation made by the Association. He contended that in the present case also the amendment carried out to Notification No. 5/99-C.E. was pursuant to represen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....CCE, Meerut, 2004 (167) E.L.T. 494 (S.C.) wherein it has been held by the Supreme Court that when law is not clear on the matter and authorities also had to issue clarifications, "invoking of Section 11A is not called for". 5.3The learned Advocate contended that the amendment to the Notification also supports the view of the Appellants and, therefore, the extended period of limitation would not apply in the present case. He contended that when the decisions of the Tribunal are holding the field during the relevant period, the change in law by subsequent decision can not amount to suppression. He relied upon the following decisions : (i) Raunaq International Ltd. v. CCE, Surat, 2001 (138) E.L.T. 1009 (T) Extended period of limitation was held not to be applicable as the issue about excisability of the structure was in dispute. (ii) Tirupati Udyog Ltd. v. CCE, Patna, 2004 (168) E.L.T. 231 (T) (iii) Afcons Pauling Joint Venture v. CCE, Jalandhar, 2004 (166) E.L.T. 207 (T) wherein the Tribun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bstituted the Explanations the Explanation in Notification No. 5/99-C.E. reads as under : "Explanation: For the purpose of this exemption cotton fabrics subjected to the process of colour fixation by passing steam over such fabrics shall be deemed to have been processed without the aid of steam." 7.2He mentioned that the Explanation was substituted by another Explanation by Notification No. 35/99-C.E., dated 4-8-1999 as under : "Explanation : For the purpose of this exemption, cotton fabrics subjected to any one or more of the following processes with the aid of power, shall be deemed to have been processed without the aid of power or steam namely :- (a) lifting to overhead tanks or emptying in underground tanks or handling of chemicals such as acids, chlorine, caustic soda, (b) mixing and stirring of dyes, kerosene, caustic soda, gum paste and emulsion etc. by stirrer, or (c) colour fixation by passing steam or applying sodium silicate." 7.3He contended that by substituting the Explanation subsequently, the Government has widened the scope of exempti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rification from the Department inspite of the position regarding use of power having been clarified by the Apex Court of the land. 8.2He also distinguished the decisions relied upon by the learned Advocate. He mentioned that Kanti Prasad Tibrewala decision 1999 (107) E.L.T. 190 is not applicable as it relied upon the decision in the case of Chamundi Vastra- lankaran v. CCE, 1987 (32) E.L.T. 131 (T) which was passed much more before the judgment of the Supreme Court in the case of Rajasthan State Chemical Works, which was also not cited before the Bench of the Tribunal which passed the Order in Kanti Prasad Tibrewala; that similarly the decision in Fram & Company was passed much before the judgment of the Apex Court in Rajasthan State Chemical Works case; that in Gurukirpa Resins case, the Tribunal allowed the Appeal on the ground that "The clarification of TRU on the same issue now being agitated is binding on the department and even on the Commissioner (Appeals) if such a circular is beneficial to the assessee". The learned Senior Departmental Representative mentioned that in Jai Prakash Industries case, the Appellants therein were engaged in construction activities and the excis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....olour fixation] even if carried out by using steam would not take away the fabrics from the category of being processed without the aid of power or steam. Any subsequent additions of the processes to the "deeming provision" could not amount to any clarification. As held by the Supreme Court in J.K. Spg. & Wvg. Mills case, supra, a deeming provision is an admission of the non-existence of the fact deemed. The subsequent amendment providing that cotton fabrics shall be deemed to have been processed without the aid of power or steam even if power is used for lifting of chemicals and mixing and stirring of dyes, kerosene, caustic soda etc. by stirrer, extends the scope of deeming situation and does not clarify anything. The amendment gave a benefit which was clearly not available earlier. In view of this, it can not be said that the amendment made subsequently was clarificatory in nature. The amendment made in Notification No. 5/99 (Sl. No. 102) can not, therefore, be made applicable retrospectively. 9.2The decision in the case of Gujarat Co-op Oil Seeds Growers Fed. Ltd. is not applicable as the Supreme Court, after applying "our mind to the relevant Notification 12 of 1989" has "no ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pecific findings that in spite of clear-cut ruling of the Supreme Court in the case of Rajasthan State Chemical Works, the use of power in the operation of stirrer and electric motor for lifting water and caustic soda would amount to manufacture with the aid of power, they claimed that power used for these activities would not tantamount to manufacture with the aid of power. The learned Senior Departmental Representative has questioned and in our view rightly, the bona fide belief that use of power by them in various processes would not mean processing of cotton fabrics with the aid of power. In the case of Rajasthan State Chemical Works, they were manufacturer of crude sodium sulphate. In the process of manufacture of common salt from brine, in the salt pans in which the process of evaporation takes place some quantities of sodium sulphate present in the brine also crystallise and settle at the bottom as crust. Sodium Sulphate is thus obtained as a bye-product. For the purpose of the manufacture, brine is pumped into salt pans using diesel pumps. Another Respondent M/s. Sunderson (Minerals) Ltd. manufacture lime from coke and lime stone. The raw materials are lifted to the platfor....