Order
1. These two appeals are disposed of by this common order. For the sake of convenience, the facts are taken from Civil Appeal No. 5223 of 2001.
2. The Revenue, being aggrieved, has filed this appeal under Section 35-L(b) of the Central Excise Act, 1944 (for short “the Act”) against Final Order No. C-1/574 dated 13-3-2001 passed by the Customs, Excise and Gold (Control) Appellate Tribunal, West Zonal Bench at Mumbai passed in Appeal No. E/1115R/96.Bom. By the impugned order the Tribunal has set aside the order passed by the Collector (Central Excise).
3. The point involved in the present appeal is whether the process of twisting and doubling of cellulosic filament yarn Tariff Item 18-II(ii) with a spun yarn [Tariff Item 18-III(ii)] comprising of polyester and viscose, amounts to manufacture within the meaning of Section 2(f) of the Act and if so, whether it is classifiable under erstwhile Tariff Item 68 and chargeable to duty therein.
4. The Collector confirmed the demand for duty issued to the respondent assessee on the ground that the process of twisting and doubling of cellulosic filament yarn with a blended yarn comprising polyester and viscose amounts to manufacture and imposed a penalty on the respondent. He also ordered confiscation of the goods, plant and machinery with an option to redeem them on payment of fine.
5. The Tribunal has reversed the order of the Collector relying upon the two decisions of this Court in Porritts & Spencer (Asia) Ltd. v. CCE 1995 Supp (3) SCC 219 and CCE v. Banswara Syntex Ltd. (1996) 11 SCC 55 in which it has been held that doubling or multifolding of yarn does not result in the emergence of a new commodity and that the yarn continues to be yarn.
6. The counsel appearing for the Revenue strenuously argued that this Court has taken contrary views in two different sets of cases. He has referred to Porritts & Spencer (Asia) Ltd. v. CCE 1995 Supp (3) SCC 219; CCE v. Banswara Syntex Ltd. (1996) 11 SCC 55; Rajasthan Spg. & Wvg. Mills Ltd. v. CCE (2003) 2 SCC 436 and CCE v. Madura Coats Ltd. (2005) 13 SCC 160 which are in favour of the assessee and Aditya Mills Ltd. v. Union of India (1988) 4 SCC 315; CCE v. Rajasthan Spg. & Wvg. Mills Ltd. 1993 Supp (1) SCC 420 (II) and CCE v. Bowreah Cotton Mills Co. Ltd. (1997) 11 SCC 106 which are in favour of the Revenue.
7. The point involved in this appeal has specifically been dealt with by this Court in Porritts & Spencer (Asia) Ltd. 1995 Supp (3) SCC 219 which held that doubling or multifolding of yarn does not result in the emergence of a new commodity and that the yarn continues to be yarn and, therefore, this process does not amount to manufacture. Similar is the view taken by this Court in Banswara Syntex Ltd. (1996) 11 SCC 55; Rajasthan Spg. & Wvg. Mills Ltd. (2003) 2 SCC 436 and Madura Coats Ltd. (2005) 13 SCC 160 The judgments which have been cited in favour of the Revenue i.e Aditya Mills Ltd. (1988) 4 SCC 315, Rajasthan Spg. & Wvg. Mills Ltd. 1993 Supp (1) SCC 420 (II) and Bowreah Cotton Mills Co. Ltd. (1997) 11 SCC 106 are distinguishable on facts.
8. It was argued before us that the judgments against the Revenue have not taken note of Aditya Mills Ltd. (1988) 4 SCC 315 We do not find any force in the submission made by the counsel for the appellant. The point in issue is concluded against the Revenue and in favour of the assessee by the four decisions of this Court, referred to above, out of which three decisions are by the three Hon'ble Judges. It is true that in Porritts & Spencer (Asia) Ltd. 1995 Supp (3) SCC 219 the decision of this Court in Aditya Mills Ltd. (1988) 4 SCC 315 was not taken note of but the decision of the Tribunal which was confirmed in Aditya Mills Ltd. (1988) 4 SCC 315 had been taken note of and was distinguished.
9. For the reasons stated above, we do not find any merit in these appeals and dismiss the same leaving the parties to bear their own costs.