PERFECT THREAD MILLS LTD. Vs. COMMISSIONER OF CENTRAL EXCISE, JAIPUR-II
LAWS(CE)-2015-9-12
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on September 04,2015

Perfect Thread Mills Ltd. Appellant
VERSUS
Commissioner Of Central Excise, Jaipur -Ii Respondents

JUDGEMENT

B.RAVICHANDRAN,MEMBER (T) - (1.)The appellants are engaged in production of Polyester Sewing Thread using Yarn purchased by them. They also carry out processes of dyeing and winding of the said yarn. The present appeal relates to the dutiability and classification of Polyester Sewing Thread produced by the appellants. The brief facts of the case are that the appellants filed classification list for Polyester Sewing Thread claiming CTH 5504.29 (1994 -1995) and CTH 5508.10 (1995 -1996). They claimed that Polyester Sewing Thread is not liable to duty as it is a type of cabled/multi -folded yarn. The operations of dyeing and winding carried out by them in producing the Polyester Sewing Thread did not amount to manufacture in terms of legal fiction of "manufacture" as per Note 2 of Chapter 55 of the Tariff.
(2.)Proceedings were initiated against the appellant and the Original Authority held the Polyester Sewing Thread made by the appellants as dutiable. On appeal, the learned Commissioner (Appeals) upheld the order. Aggrieved by the said appellate order, the appellant filed appeal before this Tribunal who vide their final order dated 27 -9 -2000 remanded the matter back to the Adjudicating Authority for fresh decision. The matter was decided afresh by the Assistant Commissioner. Learned Assistant Commissioner held that Polyester Sewing Thread is not a manufactured product and hence not dutiable up to amendment made in Chapter Note under Chapter 55 in the year 1996. He held that the process of dyeing and winding does not amount to manufacture. The Department filed appeal against the said order. The Commissioner (Appeals) held that the Sewing Thread mentioned in the impugned classification lists was a manufactured product and was liable to duty. He allowed the Department's appeal and set aside the order -in -original. Aggrieved by the said order, the appellant is before us. The main grounds of appeal are that the Sewing Thread made by them is not different from multiple folded or cabled yarn as defined in the Tariff. They contended that yarn and Sewing Thread are one and the same and no new commercially different product comes into existence. They also contended that the deemed manufacture provision as per Note 2 of Chapter 55 does not extend to the Tariff heading covering Sewing Thread.
(3.)During the arguments, the learned Counsel for the appellants explained with photographs the process undertaken by them after purchasing Polyester yarn. She contended that the Polyester Sewing Thread is nothing but multiple yarn dyed and wound in cones and marketed as Polyester Sewing Threads. There is no change in the essential character of the products. The learned AR reiterated the findings in the impugned order and argued that the yarn which is purchased by the appellant undergoes a series of process to reach the marketable stage of Sewing Thread. These processes are irreversible and the resultant Polyester Sewing Thread is having distinct name, character and use and is certainly known in the market as a product of particular name and usage for which the yarn cannot be put into. There is no inter -chargeable usage of these two products, namely yarn and thread, and for excise purpose the thread is emerging due to processes which amount to manufacture.
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