TaxTMI 
TaxTMI 
2005 (12) TMI 171
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....Revenue that the appellants have wrongly availed the benefit of the said notification in as much as that the concessional rate of duty for fabrics of cotton and man-made fabrics is availed when they are not subjected to any process and that they are produced in 100% export oriented undertaking only from the raw materials produced and manufactured in India. It is alleged that they were using the raw materials such as imported Polyvinyl alcohol (PVA 117) apart form indigenous raw materials, hence they were ineligible for the benefit of the said notification. The Managing Director admitted in his statement that they are manufacturing 100% cotton and polyester cotton fabrics. Their main raw materials is yarn which is obtained indigenously and t....
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.... It is contended that the definition of raw material is that the raw material should remain intact in the final product. Hence, PVA 117 is a consumable. They have supported their plea by referring to Sevaks Dictionary of Textiles which defines the process of sizing as an operation carried out on warp yarn before weaving to increase the weaving efficiency. It is stated that the dictionary also states that for this purpose, the fibres are coated with a thin layer of adhesive which include PVA. After the weaving, the PVA is removed by washing. Further reliance is placed on Encyclopedia of Textile Finishing which described PVA as a synthetic polymer used for many applications like sizing. Reference is also made to the book on Technology of Text....
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....efit of exemption notification has been extended to wax which is used in the manufacture of knitting yarn as consumables. Learned Counsel argued on the basis of the above material. He further contended that the demands are also hit by time bar as the import of PVA 117 was within the knowledge of the department and it's use was well known to them. Therefore, the show cause notice issued covering the period 11-11-98 to 15-1-2002 issued on 31-1-2001 invoking larger period is not sustainable. 3. Learned SDR defended the order and submitted that the item is a raw material and not a consumable. 4. On a careful consideration of the submissions made in the light the technical literature and extracts from various dictionaries, it is clear that....
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....ut it is a consumable. The Encyclopedia of Textile Finishing at Page 1683 also clearly spells out that the Polyvinylalcohol dispersions is significantly decreased by heating treatment above 120°C application particularly for sizes, finishes, etc. The definition of sizing in Sevak's Dictionary of Textiles at Page 505 also shows that sizing is an operation carried out on warp yarn before weaving to increase the weaving efficiency by reducing the yarn breakage during weaving. It states that this is done by preventing the surface-protruding fibres of yarn. For this purpose, the fibres extending along the yarn surface are coated with a thin layer of starch, tallow, china clay, etc. It is carried out by immersing the yarn for a few seconds in a ....