Customs, Excise and Gold Tribunal - Mumbai
New Shorrock Mills vs Commissioner Of Central Excise on 31 May, 2005
Equivalent citations: 2005(187)ELT401(TRI-MUMBAI)
ORDER
R.K. Abichandani President, (J)
1. The issue raised in this appeal is - Whether single yarn and double yarn, manufactured out of such single yarn, are distinct commercial items and whether manufacturing process was involved in making double yarn out of the single yarn?
2. The Appellate Commissioner held that the single yarn and double yarn both are different excisable goods and attract excise duty separately. We would have ordinarily accepted this view, but for the decision of the Tribunal in the case of Madura Coats Ltd. v. Commissioner of Central Excise, Trichy, reported in 2000 (124) E.L.T. 274 (T) 2000 (37) RLT 68 (CEGAT), in which the Tribunal has in paragraph 9 of the order after referring to the decision of the Supreme Court in the case of CCE v. Banswara Syntex Ltd., , held that "the process of doubling or multifolding of yarn in the present case did not bring into existence a new product and the demands raised were not sustainable, in the light of the ratio of the judgments, noted above".
3. The learned Counsel tried to urge before us, that the Supreme Court in the case of CCE v. Banswara Syntex Ltd., supra, held that, mere doubling or multifolding of the single yarn, which is manufactured, does not bring into existence a new product. This, he submitted by referring to the Head Note and also paragraph 7 of the judgment. It, however, appears to us that in paragraph 7, the Supreme Court has only referred to the contentions which were raised on behalf of the appellants and, prima facie, there is no finding in the judgment to the effect that the doubling or multifolding a single yarn does not amount to manufacture. The Supreme Court in paragraph 11 of the said judgment held that the respondent cannot be allowed to contend that the levy of excise duty is postponed to a point of time when the yarn is removed after doubling or multifolding. The liability to pay excise duty arises at first stage itself, namely, at the time of manufacture of single ply yarn. This does not amount to holding that there is no manufacturing process involved in doubling or multifolding which brings about double or multifold yarn.
4. In this context, we may refer to Item 50 of the Notification No. 31/93-C.E., dated 28-2-1993 in which 'NIL' duty is prescribed for double or multifold yarn including the double yarn manufactured out of yarn falling under Chapter 52, 54 or 55 of the Schedule on which the appropriate duty of excise has already been paid. The wordings in the Notification indicate that, double or multifold yarn is manufactured out of yarn on which appropriate excise duty has already been paid.
5. In this view of the matter, in our opinion, the matter requires consideration by a Larger Bench on the question - "Whether single yarn and double yarn both are different excisable goods and attract separate excise duty and whether manufacturing process is involved in making double yarn from single yarn?"
6. The Registry will place the matter before the President for appropriate orders for placing it before the Larger Bench.
(Dictated & pronounced in the open Court)