Sabyasachi Mukharji, J. - (1.) This is a statutory appeal under Section 35-L(b) of the Central Excises and Salt Act, 1944, hereinafter called the 'Act', against the Order dated February 22, 1944 passed by the Customs, Excise and Gold (Control) Appellate Tribunal, hereinafter called the 'CEGAT'.
(2.) In this appeal we are concerned with the question whether there was exigibility to taxation on the item concerned under the Act. It appears that during the course of investigations made against Swastik Investment Company, Bombay, the Central Excise Officers found that some of the consignments of the material described in the documents as 'crimpled uncut waste' were cleared from M/s. Swadeshi Polytex Ltd., Ghaziabad, during the period from Jan. '74 to Dec. '77 and were purchased by the respondents herein and utilised in the manufacture of the polyester staple fibre. The Collector held that the so-called 'crimpled uncut waste' purchased by the respondents was, in fact, polyester fibre tow and the staple fibre which were commercially two distinct products and the respondents had carried on manufacture of polyester staple fibre from tow and, as such, exigible to duty. The respondents filed an appeal before the Central Board of Excise and Customs against the Collector's Order. The appeal was thereafter transferred to CEGAT in pursuance of Section 35-P of the Act.
(3.) It appears that there is distinction between a tow and staple fibre. The Ministry of Finance (Deptt. of Revenue)'s circular indicates as follows:- "Tow is a collection of many parallel continuous filaments without twist which are grouped together in rope like form. Tow is used for the same purpose for which staple fibre is used. Tow is mainly converted into staple fibre and only a negligible quantity is converted directly into yarn. It has been therefore decided that duty should be levied on Tow at the rate applicable to staple fibre (MF (DR and I) F.No. 50/7/71-CX 2 dt. 22-12-72)".;