Customs, Excise and Gold Tribunal - Tamil Nadu
Commissioner Of C. Ex. vs Coats Viyella (India) Ltd. on 5 September, 2000
Equivalent citations: 2001(128)ELT434(TRI-CHENNAI)
ORDER V.K. Ashtana, Member (T)
1. Since these appeals involve a common issue, therefore they are being considered together.
2. Briefly, the issue involved is whether the exemption contained in SI. No. 1 & 2 of Notification No. 35/95-C.E. as amended by Notification No. 84/95 dated 18-5-95 would be available to double/multifold yarn manufactured in a composite mill having facilities of spinning single yarn and used captively for further manufacture of fabrics, such doubling or multifolding having used duty paid single yarn. The yarns in question are not merely cotton yarn but also yarns made out of man made fibres. The basic dispute centres around the interpretation of proviso to the said notification which is as under :-
"Provided that the exemption contained hereinabove relating to SI. No. 1 & 2 shall not apply to clearances of yarn from a factory having facilities (including plant and equipment) for producing single yarn."
3. While Revenue contends that the said provision bars the applicability of this exemption contained in the said Sl. Nos. to any doubled or multifolded yarn manufactured by such composite mill irrespective of whether it was cleared for captive consumption or for home consumption, appellants contend that the proviso should be interpreted to mean that when such yarn is captively consumed, the exemption would be available but would be deniable only when it is removed from the factory gate for home consumption.
4. In Appeals other than E/777/99, of M/s. Coats Viyella (India) Ltd., an additional point that has been raised is that the appellant therein had always claimed exemption under SI. No. 5 of this very notification and not under Sl. No. 1 & 2 only. In this respect, appellants claim that the doubled/multifolded yarn manufactured by them does not become 'goods' since such yarn cannot be considered as 'goods' until the same is wound on reels etc., therefore while the act of twisting, doubling/multifolding would not by itself render it to be 'goods', the act of winding it on reels, whereby alone goods would emerge, is exempt under Sl. No. 5 of this existing notification. Therefore, the said doubled/multifolded yarn would enjoy the benefit of Sl. No. 5 of the notification.
5. Shri D. B. Shroff, ld. Advocate was heard with respect to appeal of M/s. Davangere Cotton Mills Ltd. (E/777/99). He submitted that the relevant words in the proviso to the said notification, which provision applies only to SI. No. 1 & 2 of the notification, are "clearances of yarn from a factory". He does not dispute that their factory has got facilities for spinning single yarn. He submits that clearances mean physical removal from the factory gate in the context of the said proviso and therefore it applies to home consumption and not to captive consumption for the following reasons :-
(a) Such captive consumptions are removed under Rule 9 which talks of removals from a place of manufacture but does not use the words "from a factory". Therefore, under Rule 9, then? is implicit for deemed removal within the factory for captive consumtion and this has to be read with explanation to the said Rule 9 which was later added thereto but has been held to be with prospective effect from 1982.
(b) As against this, Rule 49 talks of physical removal from the factory in view of the explanation to Rule 49 . The import of this is that the removal should be outside the factory. In the instant case, since the doubled/multifolded yarn was not packed end deposited into the bonded store room and thereafter removed therefrom out of the factory gate, therefore there was no removal under Rule 49 and hence the demand for duty is misplaced.
(c) He drew our attention to replacingNotificaionNo. 8/96 dated 23-7-96 wherein under Sl. No. 55.7 the words used have been "factory where manufactured". He submits that thus thus concept of examining such goods was divorced from the clearances "from a factory" to "manufacture in a factory". This is a material change in the duty exemption and this notification is not a clarificatory one as it is general exemption notification containing hundreds of items and therefore would not be applicable retrospectively.
(d) He submits that the case of Bombay Mill Owners Association v. UOI as in 1996 (83) E.L.T. 278 (Bom.) relied upon by Revenue had not considered the concept of captive consumption at all but had only considered the situation where yarn was removed into the open market and therefore the same stood distingu shed on facts. He also referred to the definition of "factory" in Section 2 of the Act.
(e) He contested that while interpreting the said proviso the words "from a factory having facilities (including phint and machinery) for producing single yarn" would not be the correct interpretation as the principal fact related to clearances of yarn from such a factory i.e. a factory having facilities for producing single yam. The net effect of this was that the words "clearances of yarn" cannoi be disjointed from the words "from a factory" nor can the words "fiom a factory" only be linked to the subsequent words as mentioned. Thus, the correct interpretation would be that whenever the goods are cleared from a factory for sale to the market, by a composite mill, duty would have to be paid because the said clearance from the factory would mean clearance from the factory gate. The paramount words in this are "clearances on sale from a factory".
(f) In view of the above interpretation, the object of the notification is clear and is as follows :-
When a composite mill clears doubled/multifolded yarn from its factory gate for sale into the market, the exemption contained in this notification is not available and hence such yarn reaches the open market after payment of duty. Thereby the protection is afforded to the independent doubler/multifolder whose yarn reaching the market is exempt and can therefore easily compete with that of the composite mill which is expensive having suffered duty. He submits that such an interpretation does not defeat the object of the notification. Therefore, he concluded that proviso cannot apply to clearances of yarn captively consumed and hence exemption in Sl. No. 1 & 2 would be available to them, as it is not disputed that single yarn used had been duty paid.
6. Ld. DR on the other hand vehemently opposed this and submitted that such hairs splitting would defeat the very object of this proviso of the notifications. He cited the decision of Mining And Allied Machinery reported in 1982 (10) E.L.T. 517 (G.O.I.) and reiterated Para 5 of the order-in-appeal by submitting that removal and clearance has the same meaning. Similarly, he cited the decision in the case of Zuari Agro Chemicals Ltd. as in 1997 (89) E.L.T. 707 (T) which dealt with distinction between clearances and removals. He also cited the case of CC v. Pawan Tyres (para 12) as in 1998 (101) E.L.T. 140 (T) and the of Maneklal Herald Spinning And Ors. v. UOI in 1978 (2) E.L.T. J.618 (Guj.). He also cited the case of CC v. Kohinoor Mills as in 1995 (77) E.L.T. 42 (S.C.). He further submitted that this issue of removals from factory gate was not agitated by the appellants before the lower authorities
7. Learned Advocate Shri Shroff countered these submissions by reiterating that these judgments were of no help to Revenue as they did not examine the issue of "clearances from a factory" as the phrase existed in the said proviso, and therefore stood distinguished.
8. Heard Shri S.S. Thakur, Senior Vice President of M/s. Coats Viyella (India) Ltd. for the other appellant who after adopting the aforesaid arguments of ld. Advocate Shri D.B. Shroff, further submitted as follows :
(a) The quantification of the duty amount is not correctly done and the margin of profit has been wrongly applied.
(b) Notification No. 22/96 has not been considered.
(c) While the show cause notice has proposed the demands based on the non-availability of SI. Nos. 1 & 2 of the said notification in view of the proviso contained therein, all along this appellant has claimed exemption in their declarations made under the revised Rule 173B for exemption under Sl. No. 5. The impugned notice does not give any reasons as to why the said Sl. No. 5 would not be applicable in their case. Though their removals under the said SI. No. were approved when their RT-12 returns were assessed from time to time as no remarks are made in that RT-12s disputing the availability of the said exemption under Sl. No. 5 of this very notification. Therefore, amplifying this argument, he submitted that in view of the clarification issued by the Director in the office of the Textile Commissioner, double/manifolded yarns become 'goods' only when it is wound and since winding is exempt under SI. No. 5 of the said notification, therefore no duty would be leviable on doubled/multifolded yarn wound on reels irrespective of the fact whether it was removed for captive consumption or for sale in the open market.
(d) He submits that as far as the allegation in the show cause notice after the introduction of Section 49A is concerned, the issue was further complicated because duty on the sir.gle yarn was not paid before doubling/multifolding but was paid only much later under that section after the fabrics was subjected to Excise duty and therefore what was used for doubling/multifolding wis not duty paid single yarn. Shri Thakur was at pains to explain that the words "duty paid" would mean duty "ought to have been paid" but not actually paid. Therefore, the exemption under Sl. No. 1 & 2 c annot be denied on this ground also, even though entire duties on the yarn were paid at the factory stage under Section 49A.
(e) He further submitted that proviso to the no ification does not apply to the exemption claimed under Sl. No. 5. Since RT-12 returns have already been assessed allowing exemption claimed under Sl. No. 5 of the said notification, and since the issue agitited through the show cause notice in question is only denial of exemption under Sl. No. 1 & 2, therefore in this case a situation arises wherein the department ha.. acceded to duty exemption under SI. No. 5 but has proposed denial of duty exemption under Sl. No. 1 & 2. In this connection, he submits that when under one part of the said exemption notification i.e. Sl. No. 1 & 2 if it was held that the said proviso barred the exemption, hence on that ground the exemption already acceded by the department under Sl. No. 5 could not be now revoked. This is bemuse if it is found that in one case duty exemption is not applicable but in another case it has been allowed, then the manufacturer has a right to avail of the exemption, which has been allowed.
9. Learned DR submitted that since the dispute pertained to the period in which the approval of classification list had already been done away with by law, therefore the department had not given any approval on their declarations with respect to their claim of exemption under Sl. No. 5. As far as the matter of assessment of RT-12s was concerned, the documents on record were not available for verification of this issue. Secondly, he countered Shri Thakur's argument that since the process of winding is exempt, therefore duty would not be leviable on doubled/multifolded yarn wound on reels. He submitted that levy of duty would arise only when an}' item became excisable goods. Therefore, in this case, the doubled/multifolded yarn became excisable goods not immediately when it was doubled or multifolded on the machine but only when it was wound on the reels. Serial No. 5 of the notification did not exempt freshly manufactured new type of goods like doubled/multifolded yarn merely because they became goods only after being wound on reels etc. The object of Revenue behind the said Serial number was to avoid the double incidence of duty on yarn which had suffered duty when it was subjected to the processess mentioned therein which included winding on reels etc. In this case, even if it is held that the process started with duty paid single yarn, however what was wound on reels was not single yarn (duty paid) but a new product called "doubled/multifolded yarn". Therefore duty should not claim to be exempted on this merely because of the fact of winding. This was an illogical interpretation of the exemption contained in Sl. No. 5.
10. We have carefully considered the submissions and records of the case. Availability of S. No. 1/2 of Notification being common to both appeals, it is taken up first. Ld. Advocate submitted on the correct construction of the words in the proviso, which all concede does not apply to Sl. No. 5, and which reads as follows :-
"Provided that the exemption contained hereinabove relating to Sl. No. 1 or 2 shall not apply to clearances of yarn from a factory having facilities (including plant and equipnent) for producing single yarn".
11. While revenue submits that above words mean that yarn cleared from a composite mill will be denied exemption for both captive consumption and clearances outside factory gate, ld. Advocate harps on words "clearances... from factory" and submits that this proviso applies only to physical removals outside factory gate. Their arguments and case laws are already recorded above. Our considered view is that the proviso bars duty exemption to multifolded/doubled yarn manufactured by composite mills when used captively as well as when cleared from factory gate for the following reasons :-
(a) The entire proviso is to be read plainly and together and cannot be fragmented into constituent phrases.
(b) The well-established case laws cited by ld. DR show that no theoretical distinction could be made between the words "clearance" and "removal" in the Rules.
(c) Therefore, any type of clearance or removal of the goods for any purposes would attract the proviso, including that for captive consumption. Goods cannot be so captively consumed unless "cleared" from the spot where they arise as "goods" or from the assessees Bonded Store Room, as the case may be. This fact cannot be brushed aside by interpreting the words "from a factory" in isolation of the rest of the proviso.
(d) The clear intention of this legislation is to make a distinction on levy of duty between such yarn manufactured by a small independent spinner and a large composite mill. Ld. Advocate's submission recognises and accepts this intention when he argued that as long as yarn reaching market from composite mills is duty paid, unfair competition between the two sectors would be avoided. But his logic is not complete. What about the price advantage his fabric shall get (from not bearing incidence of yarn duty) when it is cleared into the market vis-a-vis fabric woven out of duty paid yarn of independent spinner by the weaver? Yarn by itself is not a final consumable product. Its main use is to produce cloth. Hence this intention of Govt. has to be viewed up-to the fabric stage, which is consumed both in wholesale and retail. Hence, ld. Advocate's this very argument lets his case down.
(e) We cannot be a party to a position where on a hair splitting and rhetorical argument, this clear intention is negated and a pandora's box is opened in favour of composite mills and to the utter detriment of the smaller independent spinners on the ground that the phrase "from a factory" would supercede in importance and significance than the words "clearances...factory having" facility of more than spinning. Such hair splitting or fragmentation is a dangerous path to adopt. We read the proviso in its entirety and conclude that the words "from a factory" cannot be read in isolation of the phrase following it. Therefore, since "clearance" would include removal for captive consumption, when the entire proviso is plainly read together and at one go, the only conclusion reached is that denies exemption to composite mills on all yarn so produced by them and cleared for either captive consumption or home consumption.
(f) While coming to this conclusion, we are not influenced by the fact that Rules 9 & 49 were amended later and may not have retrospective effect. We have not and need not address ourselves to this question in the present context.
12. The second issue raised in the notice with respect to Sl. No. 1 /2 of the notification is that exemption thereunder is deni2d on the ground that when duty is paid as per Rule 49A, at the fabric stage, what yarn is cleared for weaving having not "paid" duty, the conditionality of using only duty paid yarn is not satisfied. We cannot accede to this view, because it is now a well laid down law that "duty paid" would also mean "duty ought to have been paid" but by some other law was not collected. We find that law distinguishes between levy and collection, including stages of both. The case law cited by ld. Advocate as recorded above clearly holds so. Therefore, if collection of yarn duty is, for certain conveniences to both assessee and Revenue deferred to the fabrication point by Rule 49A, and if assessee chooses to operate thereunder, exemption is not deniable on that ground alone. It is nobody's case that the yarn did not suffer duty at fabric stage.
13. With respect to the issue of Sl. No. 5 of the notification, ld. Vice President of appellant company has vehemently arguec as follows :-
(a) as per Textile Commissioner's office letter on record, any yarn does not become goods unless it is "wound".
(b) Therefore when they double/multifold single yarns (albeit duty paid), the said multi-yarn does not become "goods" as soon as it so emerges (as distinct from single yarn) on the multifolding/doubling machine.
(c) It becomes 'goods' only when it is wound on reels/cones etc. But since reeling is exempt under SI. No. 5, therefore that exemption is available to this yarn.
14. We are not in a position to agree with this for the following reasons :-
(i) If yarn does not become "goods" till it is wound on reels/cones/cheeses etc., then this opinion of ld. Textile Commissioner overlooks the fact that a large and distinct market exists for yarn in "hanks". Such hanks are not wound on any 'core' such as reels/cheeses and cones.
(ii) The said exemption is for any yarn, which is other than single yarn, being made out of such duty paid single yarn. This position is not disputed. Therefore, when two or more strands (lines) of such single yarn are fed on to a suitable machine for folding (doubling or multifolding), what emerges is a doubled or multifold yarn. Such yarn is sold as either wound on a 'core' or in hanks form. In either case, this manufacturing process is not complete till the yarn is either made into hanks or wound on a 'core'. We do not dispute this fact. But our objection to ld. Vice-President's argument is on the ground that this exemption is not for manufacture of doubled/multifold yarn, which is what they do. On the other hand, the said exemption is to a much simpler process than such a manufacture - - a mere process of beaming, reeling etc. where the machinery employed is relatively cheap, the technology very simple and the producer merely so rewinds the yarn for making it suited for further use of weaving. Above all, the yarn remains the same duty paid yarn. Therefore, to avoid confusion and litigation, Govt. has bestowed an exemption on the goods arising out of this simple process. We cannot misinterpret this exemption and make it available to manufacture of doubled /multifolded yarn which involves -
(a) more intricate machinery,
(b) more sophisticated technology and
(c) where the resultant yarn has acquired a new and distinct identity from the single yarn used as input.
While arriving at this conclusion, we also take note of the fact that even doubled/multifold yarn cannot be used for weaving unless it is suitably wound on warp beams or 'reeled' on a suitable 'core' for use as 'weft' yarn. Such a "core" need not be necessarily a "shuttle" as shuttle-less looms are now a technological reality. Yet even these need such reeled yarn to be fed in as a 'weft' of the fabric, as every woven fabric must have "warp" & "weft". Many independent power-loom weaver's do not invest in such reeling/beaming facility and get this done on job work. It is the long standing intention of Govt. to exempt the yarn arising out of such process which are clearly distinct from manufacture of a new distinct category of yarn (multifolded/doubled) than single yarn.
15. Merely because this process of manufacture also involves taking up the newly emerged new type of yarn on reels, the entire process of manufacture of this new product cannot be exempted by a provision to exempt mere "reeling" or "beaming". That would be over-sirr plifying the issue to the ridiculous extent of exempting a freshly manufactured new type of yarn (than its inputs) in the guise of being merely "reeled" yarn which has already suffered duty. An exemption notification cannot be interpreted to render Chapter Note 1 of Chapter 52 otiose; the latter stautory provision works supercede the former delegated legislation.
16. Applying these conclusions on law to the facts of the cases in these two cases, we come to the following conclusions :¦
(i) In the case of respondents M/s. Coats Viyella (India) Ltd. (Appeal Nos. 1859/98 & 1845A/98) they have claimed exemption under SI. No. 5 in their declarations under Rule 173B and their RT-12s may have been assessed accordingly from much before issue of notices. The fact on the nature of RT-12 assessment is not clear from records before us. There is nothing on record also to show us whether the Asst. Commissioner while scrutinising their declarations under Rule 173B, had challenged the exemption claimed under Sl. No. 5 ibid. We have seen few such declarations on record. All along appellants have submitted that they do not claim exemption under Sl. Nos. 1 & 2 but under Sl. No. 5, whereas the relevant notices seek to deny them exemption under Sl. No. 1 & 2, there being no whisper of denial under Sl. No. 5 ibid in the notices. If they have never claimed exemption under serial Numbers 1 6 2 ibid, where was the need to issue notices thereon? We have no answer to this question! It is well laid down law that any assessee can claim benefit of an exemption notified and if there are more than one such notifications or grounds therein, he has a choice of claiming either a specific exemption, or both. But what is equally well laid down law is that Revenue cannot force the appellant to choose any particular exemption. To claim any exemption is his prerogative. The facts in these appeals are appellants all along claimed under Sl. No. 5 (much before issue of notices) whereas these notices se;k to deny on Sl. Nos. 1 & 2 only. Since there is no meeting point between the two positions, even though we have ruled on merits on all the three serial numbers of this notification, we find that the matter in these appeals need to be remanded to the original authority for the following reasons :-
(a) Appellants have claimed that both in their declaration under Rule 173B and in their G.P.I and RT 12s, exemption was availed of under Sl. No. 5 of said exemption. From records before us, we cannot verify this. Therefore the original authority needs to verify this claimed position and reconsider the same.
(b) If appellants claim at (a) above is found to be true by original authority, then, since notices have not sought to deny exemption under Sl. No. 5 ibid, the demand raised therein shall not survive as the appellant had a right (which it duly exercised) to also claim under Sl. No. 5 (which it did). Revenue would then be free to take remedial steps as available under law to deny exemption under Sl. No. 5 in view of our findings above on merits. Original authority shall consider and decide on above terms. This is because if the notices do not refer to Sl. No. 5, this Tribunal cannot enlarge the scope of these notices, by giving a decision on Sl. No. 5 against the appellants.
(c) While considering de novo, the original authority shall consider appellants, submissions regarding errors in computation recorded above.
17. Shri S.S. Thakur during his submissions has also claimed benefit of Modvat credit on the duty paid on yarns, both single and double which are used to manufacture and clear the fabrics on payment of duty. A perusal of the orders impugned show that this claim was not raised before the lower authorities and has been raised before the Tribunal for the first time. Since the matter is being remanded to the original authority for de novo consideration on other grounds as noted above, this submission is also required to be considered by the original authority during these remand proceedings.
18. Now, we proceed to consider the appeal of M/s. Davangere Cotton Mills (Appeal No. E/777/99). We have already rejected their contentions with respect to proviso to Sl. No. 1 & 2. In the facts of this appeal, it is not disputed that their factory has composite facilities for spinning as well as weaving etc. Therefore, in view of our rulings recorded above, their claim for exemption under Sl. No. 1 & 2 would be hit by the proviso thereto, and hence there is no merit in their appeal on this count,
19. Ld. Advocate Shri D.B. Shroff had adopted the arguments raised by Shri Thakur with regard to Sl. No. 5 of notification ibid. We have already ruled on merits thereof against availability of the exemption thereunder to doubled/multifolded yarn emerging out of single yarn. The same applies here also.
20. In view of the aforesaid analysis and findings, we order as follows :-
(i) Appeal Nos. E/1845 to 1859/98 & 1845A/98 (M/s. Coats Viyella (India) Ltd) - The order impugned is set aside and the matter remanded to original authority for de novo consideration, after hearing the party, in terms of directions recorded above.
(ii) Appeal No. E/777/99 (M/s. Davangere Cotton Mills) is dismissed.
Sd/-
(V.K. Ashtana) Member (Technical) S.L. Peeran, Member (J)
21. I have carefully considered the findings recorded by my ld. brother in the noted appeals. However, I could not persuade myself despite due deliberations with regard to the final outcome of the appeal. I am of the considered opinion that the Revenue appeals against Coats Viyella (India) Ltd. is required to be rejected for the reasons to be recorded and the Revenue appeals an; to be applied in toto to the appeals filed by Davangere Mills as the issue being common and their appeals are required to be allowed for the following reasons :-
22. In the case of M/s Coats Viyella (India) Ltd., the Revenue is aggrieved with the common order passed by the Commissioner (Appeals), Trichy in Order-in-Appeal No. 4 to 20/98 disposing o:: 17 appeals filed by the party before him. A few facts are necessary for the purpose of dealing with this matter :-
The assessee is engaged in the manufacture of cotton yarn on various counts. They use cotton yarn captively for the manufacture of cotton fabrics. While manufacturing cottom fabrics, they convert single yarn to double or multiple yarn and use the same for the manufacture of fabrics without payment of duty at double/multiple yarn stage. However, duty for the manufacturing of single yarn has been paid. Similarly, they also convert nylon filament yarn and cotton yarn into nylon/cotton multifold yarn and consume the same without payment of duty in the manufacture of man-made fabrics falling under Chapter 54. They claimed exemption under Notification No. 35/95-C.E., dated 16-3-95 as amended by Notification No. 84/95, dated 18-5-95 and No. 115/95-C.E., dated 3-11-95 under Sl. Nos. 5 & 6 with regard to double/multiple yarn manufactured in their factory on the plea that the Single yarn has already paid duty and it is clearly covered by the Notification as the said yarn is being subjected to beaming, warping, wrapping, winding or reeling or any one or more of these processes as stipulated in the Notification. The Notification No. 84/95 dated 18-5-95 had the following proviso added:-
"Provided that the exemption contained hereir above relating to Sl. No. 1 and 2 shall not apply to clearance of yarn from the factory having facilities (including plant and equipment) for producing single yarn".
However, this proviso applies to Sl. No. 1 and 2 of the notification which is not the serial number for consideration to the issues and appeals before us and hence there is no need to look into this proviso, as the dispute pertaining to these appeals are with reference to Sl. No. 5 & 6 of the notification, which benefit the Commissioner (Appeals) has granted to the asscssees on the basis of the claims laid by them in their classification list, etc. The condition with regard to Sl. No. 5 is : -
"If produced out of yarn falling within Chapter 52, 54, 55 of the said schedule on which the appropriate duty or excise under the said schedule, or as the case may be, the additional duty leviable under the Customs Tariff Act, 1975 (51 of 1975) has already been paid".
The condition in Sl. No. 6 is :-
"(i) If consumed within the factory of producticn in the manufacture of doubled or multifold including cable yarn, wither or not dyed, printed, bleached or mercerised and
(ii) such doubled or multifold including cabled 5 am is purchased by a registered Apex Handloom Co-operative Socier', the National Hand-loom Development Corporation or a State Govt Handloom Development Corporation, and the payment for which is made by cheque drawn by such Co-operative Society or Corporation, as the case may be, on its own bank account".
23. The Commissioner (Appeals) in the impugned order has noted that duty has been paid on the single yarn, however, the said duty was paid at the time of clearance of fabrics in terms of proviso to Rule 49A of the Central Excise Rules which provides for such a contingency as duty can be paid at the time of clearance of the goods and in the assessee's case as there was continuous process from yarn to fabrics stage, therefore the duty on the single yarn was postponed and paid at the time of clearance of fabrics in terms of Rule 49A. Therefore, he has noted that the lower authority's plea to deny the benefit on the belief that duty has not been paid on single yarn as it was postponed till the clearance and paid at the time of clearance of fabrics is not in keeping with the terms of Rule 49A. On this aspect of the matter, my ld. brother in the order has concurred with the Commissioner (Appeals)'s findings and has also given his reasons for so doing. Therefore, the plea taken up by Revenue in these appeals is to hold that the benefit cannot be granted solely on this ground that duty on the single yarn has been postponed to be paid along with clearance of fabrics should be a ground for denial of benefit of Notification is not a proper ground and hence this ground is rejected. I concur with the findings arrived on this point by my ld. brother in his order on this aspect of the matter.
24. Ld. Commissioner in the impugned order has noted that appellants had been claiming the benefit under SI. No. 5 of Notification No. 35/95-C.E. and as amended from time to time. However, the lower authority had proceeded to deny Sl. No. 1 on the ground that the proviso of the notification bars the assessee from making a claim as the appellant's factory is having facilities (Plant and equipments) for producing single yarn, i.e. in cases where there is a composite mill. In the present case, the Commissioner has proceeded to consider their claim of the benefit of Sl. No. 5, which does not have this proviso as the proviso of composite mill refers only to Sl. No. 1 & 2. The Commissioner has noted in the order that since the single yarn has already discharged duty, therefore the yarn subjected to the process indicated in Sl. No. 5 of the notification would clearly be entitled for the benefit of Notification as the conditions stipulated under these two serial numbers have been satisfied in as much as the yarns subjected to the processes described therein had been manufactured out of yarn which had suffered appropriate duty. I am of the considered opinion that the yarn which has been subjected to the processes indicated therein had already suffered duty as a single yarn and double yarn had not emerged and come into existence even before subjecting the same to these processes. The assessee's plea before us had been that although the single yarn had formed into double yarn, but it had not yet come into existence and that they are not in a marketable stage and that the marketable stage as per RG-23-I stage is only when such yarn is subjected to the processes indicated. There is force in this argument as the single yarn on getting doubled would not become a marketable double yarn till such time as it has reached the marketable stage and that the marketable stage is the stage when the goods have come into existence for excisability and dutiability purposes. It cannot be concluded that the yarn which was subjected to the processes indicated in Sl. No. 5 was a double/multifold yarn already come into existence and it had not suffered duty and those processes were independent of the processes of double/multifold yarn. In my opinion, the processes indicated in Sl. No. 5 like beaming, warping, wrapping, winding or reeling or any one or more of these process are processes connected with manufacture of double/multifold yarn. Only after these processes have been completed, a dot ble/multifold yarn has come into dutiable and marketable stage. When the single yarn gets itself twisted into a double yarn strand, it cannot be said thai a marketable stage has come into existence at that stage itself without the same being subjected to beaming, warping wrapping, winding or reeling or any one or more of these processes. The double/multifold yarn can be said to have come into existence only when it is beamed, warped, wrapped, wound or reeled and it is at that stage the goods are ready for durability purpose. It is seen that there is no clause in the notification that it applies to small unit era unit or powerloom weavers. There are no such condition also indicating that a manufacturer of double/multifold yarn having intricate machinery or sophisticated machinery is not entitled for the benefit of such a notification. Therefore, in my humble opinion, the findings arrived at by my ld. brother that Sl. No. 5 & 6 would not be available to a unit having intricate machinery or sophisticated machinery is not agreed to by me for the reason that such wore ings not being in the Notification, therefore Notification in Sl. No. 5 cannot be read in that manner so as to make the Sl. No. 5 otious, meaningless and redundant. It is also seen that the assessees are paying duty both at the single yarn stage and at the fabric stage. Therefore, it is clear that reasonable interpretation of the Notification has to be done and applied. In case if the benefit is not extended to double/multifold yarn after the duty has been paid on he single yarn, then Sl. No. 5 would never come into play. Therefore, a reading of the notification in a manner so as to make it redundant should be avoided There is no such plea raised also in the grounds by Revenue in their appeal that Sl. No. 5 is requiredto be denied on that basis. The only ground raised is that doubling of yarn is one of the processes amounting to manufacture and conversion of such yarn from one form to another would also amount to manufacture as per notes of Chapter 52. I am of the humble opinion that for interpreting in terms of Sl. No. 5 of the notification, we cannot press into applicability the Chapter Note of Chapter 52 alone. The Chapter notes and Section notes are required to be applied only for the purpose of interpretation of Excise Tariff and it cannot be applied for interpretation of Notification when the notification does not incorporate Section Note and Chapter Notes. It is a settled law that Section note and Chapter notes of Tariff Act cannot be applied for interpreting a notification as can also be seen from the ratio laid down by the Tribunal in the case of Maniti Udyog and Sipani Automobiles v. CCE as reported in 1996 (16) RLT 646 and Winter Mishra Diamond Tools Ltd. as reported in 1996 (83) E.L.T. 670. Therefore, grant of benefit of Sl. No. 5 of Notification to the yarn subjected to the process indicated, on the basis that duty is deemed to have been paid on single yarn is a correct finding and arrived at by ld. Commissioner (Appeals), it requires to be upheld.
25. The other ground raised in the appeal is that the Bombay High Court judgment in the case of Bombay Mill Owners' Association v. U.O.I, as reported in 1996 (83) E.L.T. 278 has laid down that Notification No. 35/85 is meant for independent small processors and not for large composite mills is required to be applied to the facts of the present case, is not an acceptable ground for the reason that the ld. Commissioner has already indicated in his order after due verification that this judgment is with reference to Sl. No. 1 & 2 of the Notification and does not have any relevance whatsoever in the instant case where exemption was claimed under Sl. No. 5. Further, Sl. No. 5 had not been mentioned in the proviso to the Notification. Therefore, Sl. No. 5 of the Notification has to be independently interpreted sans proviso, which applies to only Sl. No. 1 & 2. Therefore, this ground raised by the Revenue in the appeal is also required to be negatived. However, it is interesting to note from the grounds (c) of the appeal that Revenue is not seriously contesting granting the benefit of Sl. No. 5 to double yarn, but had only pleaded that the postponement of duty on single yarn at the time of clearance of fabrics under Rule 49A would lead to a conclusion that single yarn used for manufacture of double yarn is deemed to be not duty paid. They contend that on this ground alone, the benefit of Sl. No. 5 is required to be denied. We have already held single yarn is deemed to have been cleared on duty, as the payment has only been deferred in terms of Rule 49A and therefore, it cannot be presumed that single yarn had not suffered duty. Therefore, on this ground, the benefit of Sl. No. 5 cannot be denied. For the reasons indicated above, I am of the considered opinion that the impugned order passed by Commissioner (Appeals) allowing the 17 appeals of the assessees is required to be confirmed and the Revenue appeals are required to be rejected.
26. It was also argued by the representative of the assessee that Revenue was not justified in denying them the benefit of Modvat credit while clearing the double yarn on payment of duty as duty has been paid on single yarn. Although I have recorded that the assessee is entitled for the benefit of Sl. No. 5 notwithstanding this finding, I agree with the assessee's plea that Revenue was not justified in denying the benefit of Modvat while claiming the benefit of Sl. No. 1 & 2 of the notification also in the matter. However, this aspect is academic in so far as my order is concerned I have held that they are entitled for benefit of Sl. No. 5 of Notification.
27. As regards the appeal of Davangere Cotton Mills, the issue is common. In the impugned Order-in-Appeal, the Commissioner had examined only the applicability of Sl. No. 1 and there was no consideration of SI. No. 5. Ld. Advocate Shri D.B. Shroff had adopted the arguments raised by the assessee's representative in Coats Viyella case with regard to Sl. No. 5 also. He has also strongly pleaded for grant of benefit under Sl. No. 1. However, I am of the considered opinion that the denial of benefit of Notification under Sl. No. 1 is justified, as there is no denial of fact that the appellants' factory is hit by the proviso of Notification pertaining to Sl. No. 1 & 2. The only plea of the Revenue that single yarn has not suffered duty on account of postponement of payment under Rule 49 A is required to be negatived, as ilready held by my ld. brother and concurred by me on this ground. However, the Commissioner (Appeals) in this case interpreting the term double yarn and multifold yarn in terms of HSN Explanatory Notes is not proper as HEN Explanatory Notes cannot be applied in interpreting a beneficial notification, further HSN Explanatory Notes are for the purpose of interpretinj; the Customs Tariff. Moreover, HSN Explanatory Notes are only having a persuasive value for interpreting Excise Tariff as well. But the same cannot be applied for interpreting a beneficial notification. The Commissioner's reliance of applicability of Bombay Mill Owners' Association case (supra) is also not correct as the citation has relevance and applicability only for Sl. No. 1 & 2 in view of the proviso in the notification and it has no applicability for interpreting SI. No. 5 of the Notification. Therefore, while upholding the rejection of benefit of Sl. No. 1 & 2 of the Notification, I hold that the facts being common with regard to both the cases, the benefit of Sl. No. 5 in so far as this case is concerned is also required to be applied and granted and hence, the appellants succeed on this ground alone and not on the ground on which the Commissioner has denied the benefit of Sl. No. 1 & 2. Hence, the appellants succeed on Sl. No. 5 of the notification in question.
Sd/-
(S.L. Peeran) Member (J) POINTS FOR DIFFERENCE
28. In view of the difference of opinion between the Members in respect of the appeals, the following points are referred :o the 3rd Member for his opinion :-
(i) Whether the appeals of Revenue in the case of Coats Viyella (India) Ltd. are required to be remanded in terms of Member (T)'s order for duty computation purpose while holding that the appellants are not entitled to the benefit of Sl. No. 5 of Notification No. 35/85-C.E. as amended by Notification No. 84/95, dated 18-5-95 as well as Sl. No. 1 & 2.
OR The appeals are required to be dismissed in :erms of the findings recorded by Member (J) holding that Sl. No. 5 & 6 of the said Notification is required to be extended in terms of the impugned order.
(iii) Whether the appeal of Davangere Cotton Mills is required to be rejected by upholding the impugned order in terms of Member (T)'s findings & the impugned order in so far as the denial of Sl. No. 1 & 2 of the Notification be confirmed OR The appeals are required to be allowed on the basis of findings recorded in the appeals of Coats Viyella (India) Ltd. by granting the benefit of SI. No. 5 of the Notification as held by Member (J) in his order.
Sd/- Sd/- (V.K. Ashtana) (S.L. Peeran) Member (Technical) Member Qudicial) P.G. Chacko, Member (J)
29. These cases have arisen for my consideration as Third Member on account of the difference of opinion between learned Member (Technical) and learned Member (Judicial) of the South Zonal Bench of the Tribunal as per Misc. Order No. 50/2000. These are 17 appeals, out of which 16 appeals viz. Appeal Nos. E/1845 to 1859/98 (including E/1845A/98) are by the Department and the remaining one viz. Appeal No. E/777/99 is by an assessee other than the respondent in the Department's appeals.
30. The respondents in the Department's appeals were engaged in the manufacture of cotton yarn of various counts. They used cotton yarn captively for the manufacture of cotton fabrics. While manufacturing cotton fabrics, they converted some of the single yarn into doubled or multifolded yarn and used the same for the manufacture of fabrics without paying duty at the double/multifolded yarn stage. Similarly, they also converted nylon filament yarn and cotton yarn into nylon-cotton multifolded yarn and consumed the same without payment of duty in the manufacture of man-made fabrics falling under Chapter 54. The respondents claimed exemption in terms of Serial No. 5 of The Table annexed to Notification No. 35/95-C.E. dated 16-3-95 as amended, by Notification No. 84/95-C.E. dated 18-5-95. They also claimed exemption under two other Notifications viz. Notification Nos. 8/96-C.E. dated 23-7-96 and 4/97-C.E. dated 1-3-97. Such claims or exemption under the Notifications were made by them in their declarations filed under Rule 173-B of the Central Excise Rules. Department proposed to recover Central Excise duty from the respondents on the doubled /multifolded yarn cleared for captive consumption in the manufacture of fabrics. The respondents contested the proposed action of the Department by pleading, inter alia, that they were entitled to exemption from payment of duty in terms of Entry No. 5 in the Table annexed to Notification No. 35/95-C.E. The jurisdictional Assistant Commissioner, who adjudicated the dispute, confirmed the demand of duty as raised by the Department and ordered recovery thereof under Rule 9 (2) of the Central Excise Rules read with Section 11A of the Central Excises & Salt Act. The party challenged the orders of the Assistant Commissioner in appeal before the Commissioner (Appeals) and the latter allowed the appeals by setting aside the orders of adjudication. The lower appellate authority held that the party had satisfied the conditions for availment of exemption as per Entry No. 5 in the Table annexed to Notification No. 35/95-C.E. ibid and therefore such exemption was available to them. That authority also found that no cogent reasons had been given by the adjudicating authority for holding that exemption from duty was not available to them in terms of Entry Nos. 1 and 2 of the Table annexed' to Notification No. 35/95-C.E. ibid. The Department's appeals before the Tribunal challenge the decision of the lower appellate authority.
31. The appellants in Appeal No. E/777/99 viz. M/s. Davangere Cotton Mills were also engaged in the manufacture of single yarn, doubled yarn and fabrics. They were paying duty on the single yarn at the spindle stage. The single yarn was "-hen doubled and captively consumed for the manufacture of fabrics in their factory. Whenever the appellants cleared doubled yarn from their factory for home consumption, they paid duty on such yarn. But whenever they consumed doubled yarn captively for the manufacture of fabrics, they did not pay duty on such doubled yarn cleared for captive consumption, claiming exemption from duty i|i terms of Entry No. 1 of the Table annexed to Notification No. 35/95-C.E. Department proposed to recover Central Excise duty on the doubled yarn cleaned by the appellants for captive consumption in the manufacture of fabrics, alleging that the appellants were not entitled to the benefit of exemption in terms of Entry No. 1 of the Table annexed to the Notification. The appellants denied the allegation and claimed that the proviso to the Table annexed to the Notification was not applicable to their case and, therefore, the exemption available to them in terms of Entry No. 1 of the Table to Notification No. 35/95-C.E. was not in any way affected by the proviso. The adjudicating authority rejected the appellants' plea and confirmed the demand of duty raised for the period 8-5-95 to 3-9-96 on the appellants on the ground that they were not entitled to any exemption on doubled yarn which was captively consumed, in view of the aforesaid proviso. Against the order of adjudication, the party appealed to the Commissioner (Appeals) who rejected the appeal and upheld the order of the Assistant Commissioner by relying on the decision of the Bombay High Court in the case of Bombay Mill Owners Association v. Union of India [1996 (83) E.L.T. 278 (Bom.)]. The assessee's appeal is against this order of learned Commissioner (Appeals).
32. I have carefully perused the order recorded by learned Member (Technical) and the dissenting order recorded by learned Member (Judicial) and have noted the points of difference arising for decision by me as Third Member.
33. The respondents in the Department's appeals were admittedly engaged in the manufacture of single yarn of cotton, which they converted into doubled or multifolded yarn and used the same captively for the manufacture of cotton fabrics. Though they paid duty on the single yarn, they did not do so in respect of doubled/multifolded yarn at the time of clearing the same for captive consumption in the manufacture of fabrics. The respondents also converted nylon filament yarn and cotton yarn into nylon-cotton multifolded yarn and cleared such multifolded yarn without payment of duty for captive consumption in the manufacture of man-made fabrics. Such clearance of doubled/multifolded yarns without payment of duty for captive consumption by the respondents was based on their claim of exemption of the said goods from payment of Central Excise duty in terms of Entry No. 5 of the Table annexed to Notification No. 35/95-C.E. dated 16-3-95 as amended by Notification No. 84/95-C.E. dated 18-5-95 and Notification No. 115/95-C.E. dated 3-11-95. They had stated their plea of exemption in their declarations filed under 173-B of the Central Excise Rules. They also raised the same plea in response to the show-cause notices issued by the Department. Nevertheless, the Assistant Commissioner treated the plea as irrelevant and considered that the dispute for adjudication was one relating to Entry No. 1 of the Table annexed to Notification No. 35/95-C.E. as amended. He accordingly proceeded to adjudicate the matter and held that, since the respondents had the facility for producing single yarn in their factory, they were not eligible for the exemption in terms of Entry No. 1 of the Table annexed to the Notification. The Assistant Commissioner, for arriving at such a decision, invoked the proviso added to Notification No. 35/95-C.E. by the amending Notification No. 84/95-C.E. The adjudicating authority also relied on the Bombay High Court's decision in the case of Bombay Mill Owners Association (Supra). In appeal from the orders of adjudication, the lower appellate authority, while setting aside the orders of the Assistant Commissioner, held that the respondents were entitled to exemption in terms of Entry No. 5 of the Table annexed to Notification No. 35/95-C.E. as amended. In the Department's appeals filed against the order of the lower appellate authority, learned Member (Technical) has rightly taken note of the fact that the respondents had been consistently claiming exemption under Entry No. 5 and not Entry No. 1 or 2 of the Table annexed to Notification No. 35/95-C.E. ibid. Learned Member (Technical) has answered in the negative the question whether the respondents were entitled to the benefit of exemption under Notification No. 35/95-C.E. (as amended) in terms of Entry Nos. 1, 2 or 5. Learned Member has, however, ordered a remand of the matter to the adjudicating authority to verify the claim of the respondents that they had availed of the benefit of exemption in terms of SI. No. 5 of the Table annexed to the Notification. According to the decision of learned Member (Judicial), the Revenue's appeals are required to be dismissed by holding that the benefit of exemption under the Notification was available to the respondents in terms of Entry Nos. 5 and 6 of the Table annexed thereto.
34. I find that the lower appellate authority recorded a finding to the effect that the respondents claimed exemption under Sl. No. 5 of Notification 35/95-C.E. dated 16-3-95 as amended by Notification No. 84/95-C.E., dated 18-5-1995 and also under two other Notifications, viz. Notification Nos. 8/96-C.E. dated 23-7-96 and 4/97-C.E. dated 1-3-97. This finding of fact by the first appellate authority, in my view, does not require to be interfered with, at the second appellate stage, by the Tribunal. In the light of the finding of fact reached by the lower appellate authority, the issue which emerges for consideration is whether the respondents were entitled to the benefit of exemption in terms of Sl. No. 5 of the Table annexed to Notification No. 35/95-C.E. (as amended) as also the benefit of exemption under the other two Notifications. Whether respondents were entitled to exemption in terms of Sl. No. 1 or 2 of the Table annexed to Notification No. 35/95-C.E. was not at issue in the adjudicatory proceedings inasmuch as the party had not claimed any exemption in terms of Sl. No. 1 or 2 ibid before the Department at any stage. As regards the respondents' claim with reference to SI. No. 5, the said Sl. No. 5 prescribed 'nil' rate of duty in respect of yarn falling under Chapter 52,54 and 55 which was subjected to beaming, warping, wrapping, winding or reeling or any one or more of these processes with or without the aid of power, if such yarn was produced out of yarn falling within Chapters 52, 54 or 55 on which the appropriate duty of excise has already been paid. The lower appellate authority found that since the single yarn had discharged duty in terms of Rule 49A of the Central Excise Rules, the doubled/multifolded yarn made out of such single yarn on being subjected to one or more of the processes indicated at Sl. No. 5 of the Notification would clearly be eligible for the benefit of the Notification. Learned Member (Judicial) has considered all aspects of this matter and has accepted the assessee's plea that mere conversion of single yarn into doubled yarn did not bring into existence any marketable commodity and that the product became marketable only when the yarn was subjected to the process described in Column 3 against Sl. No. 5 of the Table annexed to Notification No. 35/95-C.E. Learned Member (Judicial) has also recorded a view that the aforesaid processes like beaming, warping, wrapping, winding or reeling are processes connected with manufacture of doubled/multifolded yarn. Only after such processes have been completed, doubled/multifolded yarn reaches the dutiable and marketable stage. The mere twisting of the single yarn into doubled yarn does not bring into existence a marketable commodity without the same being subjected to one or more of the processes aforesaid. Learned Member (Judicial) has also noted that the Notification does not contain anything to show that it is applicable only to small units or to power-loom weavers or that a manufacturer of doubled/multifolded yarn, having intricate or sophisticated machinery, is not entitled for the benefit of the Notification. I am fully in agreement with the findings of learned Member (Judicial) and accordingly the respondents should be held to be eligible for the exemption under Notification No. 35/95-C.E. (as amended) in terms of Sl. No. 5 of the Table annexed thereto. I, therefore, hold that the order of the Commissioner (Appeals) is required to be upheld and the Department's appeals against the said order have to be rejected. In this connection, I note that the necessary findings of facts have already been recorded by the lower appellate authority in relation to the respondents' claim of exemption under Sl. No. 5 of the Notification and, therefore, there is no reason for remand of the matter for the purpose of verification of such claim of the party.
35. In the appeal of M/s. Davangere Cotton Mills, the only issue is whether the appellants were entitled to the benefit of exemption under Notification No. 35/95-C.E. (as amended by Notification No. 84/95-C.E.) in terms of Entry No. 1 or Entry No. 2 of the Table annexed to the Notification. The appellants have never had a case that they were entitled to exemption in terms of Entry No. 5 of the Table to the Notification. They have not raised such a plea even before the Tribunal. Therefore, in this appeal, it is not necessary to go into the question whether the appellants were entitled to the benefit of exemption under Entry No. 5 of the Notification. The question to be considered is whether they were entitled to the exemption in terms of Entry No. 1 or 2 of the Notification (as amended).
36. Learned Advocate, Shri D.B. Shroff for the Appellants has, for the first time, staked a claim under Entry No. 5 of the Notification and, in this connection, has adopted the arguments advanced by the assessee's representative in the Department's appeals. The emphasis of learned Advocate is, however, on Entry No. 1 of the Notification. He has argued that the appellant's case was not hit by the proviso to Notification No. 35/95-C.E. added by the amending Notification No. 84/95-C.E. The following is the proviso :-
"Provided that the exemption contained hereinabove relating to S. No. 1 or 2 shall not apply to clearances of yarn from a factory having facilities (including plant and equipment) for producing single yarn."
37. Learned Advocate has argued that the proviso affected only clearances of yarn from a factory and did not affect clearances of yarn for captive consumption in the manufacture of fabrics within the factory. He has sought to distinguish the meaning of the expression "clearances of yarn from a factory" from that of the expression "clearances of yarn from a place or premises for captive consumption within the factory."
38. Learned Advocate has also sought to distinguish the decision of the Bombay High Court in the case of Bombay Mill Owners Association (Supra) relied on by the adjudicating authority. According to him, the liability of duty on doubled yarn which was captively consumed by an integrated unit had not arisen before the High Court and, therefore, the decision of the High Court did not apply to the facts of the present case. Learned SDR, Shri S. Kannan has opposed the above arguments by submitting that the issue involved in this appeal is squarely covered in favour of the Department by the decision of the Bombay High Court. I am in complete agreement with this submission of learned SDR. In Bombay Mills Owners Association (Supra), a Division Bench of the High Court was entertaining a Writ Petition challenging the validity of the aforesaid proviso to Notification "No. 35/95-C.E. The Court examined the Notification in the light of the Government Policy as explained in the affidavits filed by the Additional Commissioner of Central Excise. The Court found that the initial exemption under the Notification was conferred only on doubling processes and was never intended for large composite mills referred to as "integrated units" who carried on both the activities, viz. production of single yarn and its doubling. Small processors were those who were not able to manufacture basic yarn which required huge capital investment and a project of high cost, the Court observed. Small processors including those who did only the process of doubling of yarn required much smaller capital investment. In view of these facts as stated by the Additional Commissioner in his affidavit in support of the Government Policy, the High Court held as under: -
"...We find no illegality or arbitrariness in clarifying that the exemption contained in the Notification at Exh. "B" would not apply to clearances of yarn from an "integrated unit" referred to as a factory having facilities (including plant and equipment) for producing single yarn. The result of the impugned proviso would be that it would be only the processors carrying on the activity of processing alone who would be entitled to enjoin the exemption accorded by Notification No. 35/95 at Exh. "B" dated 16th March 1995. However, once it is found that the processor is not a processor simplicitor, but has an "integrated unit", having facilities (including plant and equipment) for producing single yarn, he would not be entitled to the benefit of exemption notification at Exh. "B" in view of the impugned provisio added by Exh. "C"."
39. The ruling of the High Court is very explicit; once it is found that the processor is not a processor simplicitor but has an integrated unit having facilities (including plant and equipment) for producing single yarn, he would not be entitled to the benefit of the exemption Notification. In the instant case, the appellants are admittedly an integrated unit having facilities (including plant and equipment) for producing single yarn. Therefore, the appellants would not be entitled to the benefit of exemption in terms of Sl. No. 1 of the Table annexed to the Notification. The appellant's case is, thus, hit by the High Court's ruling. I, therefore, concur with the view taken by both learned Members that the appellants in the instant appeal are not entitled to exemption in terms of Sl. No. 1 or 2 of the Table annexed to Notification No. 35/95-CE. by virtue of the proviso to the Notification.
40. Learned Member Oudicial) has, however, granted the benefit of exemption to the appellants in terms of SI. No. 5 of the Table to the Notification. With great respect, I disagree with this part of the order of learned Member (Judicial). The appellants have never had any claim under Sl. No. 5 of the Notification and, therefore, none of the lower authorities has had occasion to go into the question whether the appellants were entitled to exemption in terms of Entry No. 5 of the Notification. They have no such claim even in the memorandum of the present appeal. It is not permissible, in my considered view, for the Tribunal to grant a relief to the appellants, which they have not prayed for in the appeal. It will be beyond the jurisdiction of the Tribunal conferred by statute. To mould relief is a realm that belongs to courts of plenary jurisdiction. I would, therefore, hold that the appellants in the present appeal are not entitled to any relief other than what they have prayed for in the appeal. Accordingly, as regards the present appeal, I am completely in agreement with the decision of learned Member (Technical) who has ordered that the appeal of M/s. Davangere Cotton Mills is required to be rejected and the order of the lower appellate authority in so far as it relates to denial of the benefit of the Notification in terms of Sl. Nos. 1 and 2 is required to be upheld.
41. In the result, Point No. 1 referred to me stands decided in concurrence with learned Member (Judicial) and Point No. 2 stands decided in concurrence with learned Member (Technical). The points of difference stand answered accordingly.
42. Registry shall take steps to formalize the Majority decision.
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(P.G. Chacko)
Dated : 21-8-2000 Member (Judicial)
MAJORITY ORDER
43. In terms of the Majority Order, the Revenue appeals against M/s. Coats Viyella (India) Ltd., Madurai are dismissed and the appeal of M/s. Davangere Cotton Mills is also dismissed.