Customs, Excise and Gold Tribunal - Mumbai
Ambaji Syntex Pvt. Ltd., Somani ... vs Commissioner Of Central Excise, ... on 18 June, 2001
ORDER
Gowri Shankar, Member (Technical)
1. The applications are for of deposit of the amounts mentioned against each:
---------------------------------------------------------------------------------------------------------------- Name Duty Penalty Redemption Fine
----------------------------------------------------------------------------------------------------------------- Ambaji Syntex Pvt Ltd Rs. 1.79 Rs. 1.79 crores Rs. 20,000/-
Karanj crores appxor approx
------------------------------------------------------------------------------------------------------------------ Ambhaji Syntex Pvt Ltd, Rs. 1.50 Rs. 1.50 crores Rs. 20,000/-
Pipodara crores
------------------------------------------------------------------------------------------------------------------- Mahesh Textrises Rs. 7.19 Rs. 7.19 lakhs Rs. 20,000/-
lakhs
-------------------------------------------------------------------------------------------------------------------- Somani International Rs. 7.11 Rs. 7.19 lakhs Rs. 20,000/-
lakhs
---------------------------------------------------------------------------------------------------------------------
Shankarlal Rs. 50,000/-
---------------------------------------------------------------------------------------------------------------------
Maheshbhai Rs. 50,000/-
---------------------------------------------------------------------------------------------------------------------
2. We have heard the counsel for the applicants and the departmental representative.
3. Mahesh Texterisers Ltd and Somani International texture partially oriented yarn which they receive from the manufacturer. Duty has been demanded from them on the ground that they were not entitled to the benefit of notification 1/93, for the reason that they affixed the customers brand names on bobbins on which the yarn was wound. The counsel for the applicant says that prima facie the ratio of the Tribunal decision in Khanna Industries vs CCE 1996 (82) ELT 109 goes against him. he therefore undertakes to pay the duty demanded on these two within a month. On such deposit, we waive deposit of the penalties imposed and redemption fine and stay their recovery.
4. Compliance on 6.8.2001.
5. These two firms, after texturising this yarn, wind two strands of the yarn on one bobbin, each parallel to the other. These bobbins were sent to one of the two units of Ambaji. That unit subjected each of the two strands to twisting. it did not pay duty on such twisting and notice issued to it proposed to demand duty on such twisted yarn, classifying it under heading 5402.59 of the tariff. In reply to the notice, it was claimed that the benefit of Entry 1, 2 & 5 of the Table to the notification 35/95 would be available. This first entry exempts from duty yarn doubled or multifolded. The Commissioner finds that the yarn continues to be single twisted yarn continues to be single twisted yarn, and has confirmed the demand for duty and imposed penalty.
6. It is somewhat difficult to follow the Commissioner's reasoning, which is contained in the portion of his order reproduced below:
"There is reportedly no separate individual machine for carrying out 'Doubling' process after the stage of Draw Texturised PPMF parallel wound yarn. It is either taken up for Up-Twisting or Down-Twisting processes to provide desired strength and cohesion of filaments. In case of Down-Twisting process, the machine used is called 'DOUBLER'. However, in the case of above mentioned units Up-Twisting process is carried out in the parallel wound drawn Text. PPMF yarn on TWO FOR ONE TWISTERS and, therefore, no doubling operation takes place."
7. The Fairchild Dictionary of Textiles, the book, Textile Terms and Definitions of the Manchester Institute of Textiles, and the Glossary of Textile Terms of the Bureau of Indian Standards all indicate that twisting or doubling requires a minimum of two yarns. None of them suggests that a monofilament yarn is subject to twisting. In addition, we do not find any material on the basis of which the Commissioner says that uptwisting and downtwisting, which he finds are done to the yarn, does not amount to doubling. The fact that there is no separate doubler machine employed by the applicant is not relevant. Doubling takes place in the course of twisting of the two yarns together. The reference in his order to the Explanatory Notes to the Harmonised System of Nomenclature, which provide that yarn comprised solely of monofilament of heading 54.02 or 54.03 held together by twisting are not to be regarded as multi (folded) yarn is incorrect. The Notes below Heading 54.02 in the Explanatory Notes suggest that the reference of the mono filament held together is with reference to the condition in which such filament emerges form spinnerets. That doubling would prima facie apply to yarn deliberately twisted together is clear from the Notes at page 780 where it explains that multiple yarn is yarn formed from two or more single yarns. There is no denial that the applicant has used two yarns. The Commissioner's reasoning, as we have noted, is not only not clear but lacks authority. On the other hand the Book Yarn Preparation and handbook by John A Iredale indicates that the machine that the applicant employed is a type of folding or doubling equipment.
8. In these circumstances, we do not feel to call upon these two applicants to deposit the duty and penalty and stay their recovery.
9. Having regard to the amount involved, we accept the prayer for early hearing. Appeals to be listed for hearing on 10.9.2001.