Full Judgment
In the result the appeal succeeds and is accordingly allowed. The impugned order is set aside with the directions for the grant of consequential relief to the appellants.
I also find that the Asstt. Collector has while passing the common order disposing off 13 show cause notices directed that the party, if aggrieved to the above, should file separate appeal in respect of each case. I do not find any reason for endorsing this stand, when the Asstt. Collector has disposed off 13 cases, but showing it as a combined single order comprising 13 orders, the appeal filed by the appellants also has to be taken as combined appeal against all the 13 orders which comprise the combined orders. I have disposed of the appeal(s) in the above manner." 2. Briefly stated the facts of the case are that M/s. Doon Valley Combers are engaged in the manufacture of Wool-Tops from raw wool. A dispute arose whether the goods described as Noils-I and Noils-H were classifiable as goods and chargeable to duty under Tariff Item 68.
Whereas the Department was of the view that the goods described by the respondents as Noils-I and Noils-II were actually carded, combed and gilled wool arising at the final stage of conversion into tops and, therefore were liable to pay duty. The appellants contended that the goods were Noils only and were not liable to duty. Accordingly, a show cause notice was issued to the respondents asking them to show cause as to why duty should not be demanded on the goods.
3. Shri M.K. Jain, the ld. SDR appearing for the appellant submitted that the Collector (Appeals) had misconstrued the applicability of Ministry's Letter F. No. 350/21/79-TRU, dt. 4-4-1979; that this letter had clarified the position with regard to 'Noils, Shoddy and Burrs' which were a kind of soft waste obtained during the process of carding and combing; that in the instant case Carded, Scoured, Combed and Gilled wool was manufactured at the final stage of conversion into tops which has correctly, been classified under the then Tariff Item-68; that the goods in question should have been considered as manufactured goods having a different and distinct name, character and use; that the ld. Collector (Appeals) had not correctly identified the goods in question; that the Central Board of Excise and Customs in its Tariff Advice No. 26/85 issued under F. No. 13/190/82-CX. I, dt. 1-6-1985 had clarified that scoured wool would be classifiable under the then Tariff Item 68.
4. No one appeared for the respondents, however, there is a request for considering of the case on merits.
5. Heard the submissions of the ld. SDR and considered the evidence on record. The short point for determination before us is whether the goods described and cleared as Noils-I and II were scoured wool as claimed by the appellant or were Noils as claimed by the Respondents.
The respondents had relied on ISI specification No. IS : 232 : 1967, wherein the product has been described as "shorter fibres separated from longer fibres during the process of combing".
6. Now for determination whether the fibres in the instant case were shorter fibres and obtained during the process of combing, we shall have to look at the process of manufacture. The process of manufacture has been briefly described by the Asstt. Collector in his order-in-original wherein he has described :- "Greasy wool is the raw material which is subjected to process of scouring wherein wool is washed and cleaned of impurities. The scoured wool is issued to carding section wherein the cleaned wool is subjected to the process of separation and further cleaning. The tangled/matted mass of fibres is converted to a filmy web by working the fibres between two closely spaced relatively moving surface, clothed with sharp points. Thereafter it is obtained in the shape of carded sliver uncombed. The carded sliver is then subjected to the process of back-wash gilling an operation preparatory to spinning of passing carded silver through gill boxes in order to improve fibre parallelisation and thereafter it is subjected to combing, a process of separating or fractionating in a comber relatively short fibres from the long and removing the short alongwith naps and other impurities which have not been removed in earlier processes and simultaneously straightening and parallelising the long fibres to improve the uniformity of the staple." 7. From the above, we find that the process can broadly be divided into 4 stages as under :- In the appeal memo filed by the appellant it has been stated that Carded, Scoured, Combed and Gilled wool which arose at the final stage of conversion into tops of carded and gilled sliver is correctly classifiable under Tariff Item 68 of the Central Excise Tariff on the ground that these goods were fully manufactured as they have a distinct name, use and character.
8. From the evidence on record, we find that the ISI specification and glossary of textile terms clearly states that 'shorter fibres separated from the longer fibres during the process of combing are known as Noils. We also observe that combing is the last item in the process of manufacture as described by the ld. Asstt. Collector and, therefore, the goods at that stage should be manufactured, but Noils have been defined in IS specification as those obtained in the process of combing. The appellants have not brought any evidence on record to show that the goods cleared by the respondents were scoured wool except the bald statement of the Asstt. Collector that looking at the process of manufacture leaves no doubt in his mind that the Carded, Combed and Gilled wool arising at the final stage of conversion of Carded, Gilled sliver into tops is a manufactured product and that the percentage thereof was as high as 10%. ISI specifications clearly showed that the wool known as Noils in the market arise in the process of combing, and it has already been shown above that the process of combing is the last stage of the process of manufacturing wool tops. We have no difficulty in holding that the goods were Noils. No duty was chargeable on Noils in terms of Meerut Collectorate Trade Notice No. 85/81, dt. 26-6-1981.
It is not the case of the Department that Noils were dutiable under Tariff Item 68.
9. Having regard to all the facts and circumstances as discussed above we hold that the goods in dispute were Noils and, therefore, no duty was chargeable on them.
10. In this view of the matter, the impugned order is upheld and the appeal is rejected.