Customs, Excise and Gold Tribunal - Delhi
Bhilwara Spinners Ltd. vs Commissioner Of C. Ex. on 17 May, 1999
Equivalent citations: 1999(65)ECC503, 1999ECR783(TRI.-DELHI), 1999(111)ELT714(TRI-DEL)
ORDER
P.C. Jain, Vice President
1. Short question before us in these appeals is whether exemption given to "yarn, double or multifolded, manufactured out of yarn falling under Chapter 52, 54 or 55 of the said schedule on which an appropriate duty of excise has already been paid" will be extended to the yarn manufactured by the appellant herein.
2. The process of manufacture of the yarn under consideration before us in all four cases is as follows : Two single yarns of man made fibre are taken together and twisted. Thereafter another single yarn of man made fibre is taken along with the aforesaid double folded yarn and twisted again. The product so obtained is described by the appellants herein as double or multi fold yarn entitled to the benefit of Notification No. 53/91 as mentioned above. On the other hand, Revenue contends that the yarn manufactured by the appellant is cabled yarn and is not covered within the expression "double or multi fold yarn" to which the benefit of said notification is available. It is further contended by the Revenue that cabled yarn became entitled to the nil rate of duty under the said notification only when amending Notification No. 23/92-C.E., dated 1-3-1992 was issued by the Central Government. Therefore, prior to 1-3-1992, the yarn manufactured by the appellant, which is termed as cabled yarn, has been denied the benefit of Notification No. 53/91. Hence these appeals before us.
3. Ld. Advocate Shri K.K. Anand submits that the yarn manufactured by them is a 'double or multi fold' yarn as known in the Trade. He further submits that in fact under the tariff, there is no distinction or no mention of double or multi fold yarn. Consequently reliance placed by the lower authorities on definition of double or multi fold yarn and cabled yarn given in HSN Explanatory Notes (at page 707 thereof) is not at all tenable. It is well settled that notification cannot be interpreted on the basis of HSN Explanatory notes, if an exemption is given specifically to 'multi fold yarn' which finds no reference in tariff as such. It is not a question of classification to which HSN Explanatory may be resorted to by the Revenue. He further submits that even the cabled yarn, as mentioned in the Explanatory Notes as well as in Textile Dictionary definition of that term make it clear that it is also a form of multi fold yarn. He submits that in cabled yarn, there are two-fold operations of twisting whereas in the case of double fold or multi fold, there is single operation of twisting of two or more yarns. He therefore, submits that the expression 'double or multi fold yarn' in Notification 53/91 will also include the cabled yarn. From this point of view, ld. Advocate submits that amending Notification No. 23/92, dated 1-3-1992 is alike in the nature of clarificatory notification, cabled yarn being included in the expression 'double or multi fold yarn'.
4. He also relies on a Trade Notice from Bombay Collectorate available at 1986 (24) E.L.T. (T 28). For better appreciation we reproduce the trade notice:
"Sewing Thread. - As per Note 3 of Section XI of the Central Excise Tariff, Sewing Thread is a multiple (Folded) or cabled yarn. Notification No. 318/56, dated 22-5-1986 as amended (subsequently incorporated in Serial No. 3 of the Table annexed to Notification No. 53/87, dated 1-3-1987 exempt yarn doubled or multifold falling within Chapter 52, 54 or 55, if such doubled/multi fold yarn is manufactured from duty paid yarn falling within the said Chapters would be eligible for the duty exemption under Notification No. 318/80-C.E. as [amended] or Notification No. 53/87-C.E., dated 1-3-1987, as the case may be." Bombay-I Collectorate Trade Notice No. 34/87, dated 6-5-1987 [1987 (29) E.L.T. (T 28)].
5. He points out from this Trade Notice that Sewing thread as defined in Section Note 3 of the Section XI of the Central Excise Tariff is multi fold or cabled yarn and the benefit of the Notification No. 53/87, which was in the same terms as Notification No. 53/91, was extended to the sewing thread. In other words, the cabled yarn is also entitled to the benefit of Notification No. 53/87-C.E. and would therefore, also be entitled to 53/91. The two notification namely 53/87 and 53/91 being raw pari materia.
6. On the basis of aforesaid submission, ld. Advocate prays for allowing the appeals.
7. Opposing the contention, ld. JDR Shri R.S. Sangia has submitted that the reasoning adopted by the lower authorities based on HSN Explanatory Notes cannot be discarded. HSN Explanatory Notes brings out the distinction in 'double fold or multi fold' and cabled yarn. The distinction as pointed out above is in number of operations carried out in twisting. In double and multi fold yarn, the number of twisting operation is one whereas in cabled yarn twisting operation is more than once. Since it is not denied by the appellants herein that number of twisting operations are more than one in manufacture of yarn disputed before us the goods will be cabled yarn which is exempted from the duty only with effect from 1-3-1992 by virtue of issue of amending Notification 53/92 and not earlier.
8. We have carefully considered the pleas advanced from both the sides. We observe that it is not the question of classification before us. The Central Excise Tariff does not use any expression like 'double fold or multi fold or cabled yarn'. In terms of tariff it is simply yarn. Therefore, reliance on HSN Explanatory Notes for the purpose of determining the distinction between 'double fold/multi fold', or 'cabled yarn' would not be justified because exemption Notification are not always based on nomenclature used in HSN but on the basis of names as available in India. We therefore, agree with the ld. Advocate that reliance placed on HSN Explanatory Notes in the matter of Interpreting Notification No. 53/91 is not at all warranted in the facts and circumstances of the case. We further note that the reliance placed by him on Bombay Collectorate Trade Notice of 1987 is very correct. Keeping that Trade Notice in view, the benefit of Notification No. 53/91-C.E. cannot be denied to the yarn manvifactured by the appellant. Hence we set aside the impugned orders and allow the appeal with consequential relief to the appellant.