Commissioner of C. Ex. Vs. Microtex India Private Ltd. - Court Judgment

Excerpt:
1. the assessees manufactured narrow knitted-fabrics of man-made textile material (elastic tapes). the benefit of notification no.109/86 was claimed by the assessees. the assistant collector observed that since the assessees were carrying out a process of tension regulation, on sharp type r-320 em machine, the benefit of the notification was not available, in view of the proviso thereto which sets out certain processes and declares that those processes and similar processes would render the fabrics ineligible for the benefit of the notification. subsequently, the differential duty was confirmed by the assistant collector. the collector (appeals) in his order took into account, the opinion given by an independent test body namely sasmira to the effect that the operation undertaken on the elastic tape was of winding into a roll which did not result in any change in the characteristic of the elastic tape. he, therefore, held that the process of winding was a process similar to those described in the proviso in the notification. he set aside the lower order resulting in the present appeal being filed by the revenue.2. we have heard shri k.c. agarwal for the revenue and shri d.b. shroff the ld. advocate for the respondents.3. the second ground for appeal is that the notification speaks of "fabrics" whereas the elastic tapes are not called "fabrics" in trade parlance. shri agarwal chose not to comment on this ground but we find that the show cause notice itself proceeds on the assumption that the goods fall under chapter 60, the heading of which was "knitted, crocheted fabrics". the first ground is that the process to which the elastic tapes was subjected would make for application of the exclusion clause in the proviso.siddeshwari cotton mills (p) ltd. v. union of india -1989 (39) e.l.t. 498 (s.c.).in this judgment the court had taken cognizance of wording of notification no. 230/77-c.e. in interpretating the notification, the court had taken into account the definition in section 2(f) of the central excises and salt act, 1944. the court observed that for a processes to be likened to the process of bleaching, dying, printing etc., the process must be of a such nature so as to impart a change of lasting character to the fabric. the collector's finding that the process in the case was merely of rolling which did not result in any change in the structure of the fabric has not been contested in the appeal memorandum. we therefore endorse the view of the collector that the process undertaken on the fabric did not amount to a process which would render the benefit of the notification as not available.5. on this observation we uphold the collector's order and dismiss this appeal.

Judgment:
1. The assessees manufactured Narrow Knitted-Fabrics of Man-Made Textile Material (Elastic Tapes). The benefit of Notification No.109/86 was claimed by the assessees. The Assistant Collector observed that since the assessees were carrying out a process of tension regulation, on sharp type R-320 EM Machine, the benefit of the notification was not available, in view of the proviso thereto which sets out certain processes and declares that those processes and similar processes would render the fabrics ineligible for the benefit of the notification. Subsequently, the differential duty was confirmed by the Assistant Collector. The Collector (Appeals) in his order took into account, the opinion given by an independent test body namely SASMIRA to the effect that the operation undertaken on the Elastic Tape was of winding into a roll which did not result in any change in the characteristic of the elastic tape. He, therefore, held that the process of winding was a process similar to those described in the proviso in the notification. He set aside the lower order resulting in the present appeal being filed by the Revenue.

2. We have heard Shri K.C. Agarwal for the Revenue and Shri D.B. Shroff the ld. Advocate for the Respondents.

3. The second ground for appeal is that the notification speaks of "fabrics" whereas the elastic tapes are not called "fabrics" in trade parlance. Shri Agarwal chose not to comment on this ground but we find that the show cause notice itself proceeds on the assumption that the goods fall under Chapter 60, the heading of which was "Knitted, crocheted fabrics". The first ground is that the process to which the elastic tapes was subjected would make for application of the exclusion clause in the proviso.Siddeshwari Cotton Mills (P) Ltd. v. Union of India -1989 (39) E.L.T. 498 (S.C.).

In this judgment the Court had taken cognizance of wording of Notification No. 230/77-C.E. In interpretating the notification, the Court had taken into account the definition in Section 2(f) of the Central Excises and Salt Act, 1944. The Court observed that for a processes to be likened to the process of bleaching, dying, printing etc., the process must be of a such nature so as to impart a change of lasting character to the fabric. The Collector's finding that the process in the case was merely of rolling which did not result in any change in the structure of the fabric has not been contested in the appeal memorandum. We therefore endorse the view of the Collector that the process undertaken on the fabric did not amount to a process which would render the benefit of the notification as not available.

5. On this observation we uphold the Collector's order and dismiss this appeal.