NAVELE RAYONS Vs. COMMISSIONER OF CENTRAL EXCISE, BANGALORE

JUDGEMENT

(1.) THE appellant is an SSI engaged in the manufacture of embroidery yarn. They were issued certain notices alleging that they have cleared sewing thread in the guise of embroidery yarn without payment of duty and without observing Central Excise formalities.

(2.) THE process of manufacture of the impugned goods as claimed by the appellant is as follows : The basic raw material is Viscos filament yarn (VFY) popularly called artificial silk or rayon. The yarn is wound from a big cone to a smaller bobbin using a winding machine. It is then twisted by fixing into a twisting spindle and taken on to the twisting rolls. At this stage, a twist is inserted to single rayon. The next operation is doubling of two such twisted yarns by twisting them to a doubling spindle. The yarn which emerges at the stage is known as cabled yarn. The cabled yarn is then wound on a doubling PIRN and taken to the reeling machine to produce hanks. These hanks are then dyed by dipping them in open VATS containing vats or napthols or reactives to get the desired shades. These are basically colouring elements. They are then washed. Further dressing involving the use of Silicon, Paraffin or wax to impart any sort of anti -frictional properties, thermal resistance, preventing the formation of static elasticity, etc., is not done as the above properties are not required for the Embroidery yarn. It may be stated that it is not necessary to give wax treatment to get the essential characteristic of the Embroidery Yarn. The tenacity of Embroidery Yarn manufactured by the appellant is 1.3 gpd whereas the Sewing Thread has a tenacity of 3.5 gpd. The viscose rayon cannot be used as a raw material for manufacture of Sewing Thread.

(3.) IN the proceedings before the Commissioner, the appellant has said to have furnished the fundamental difference between embroidery thread, sewing thread and had reservations about the Chemical examination report relied upon by the Department and requested the Commissioner to permit the cross -examination of the said chemical examiners. They also had produced representations made by the Rayon Processors Association of India to Central Board of Excise and Customs wherein it was alleged that only in Bangalore Collectorate rayon 'embroidery thread' was being classified as sewing thread They had also produced evidence of the trade understanding of the entity in question and claimed exemption based on Notification 8/96 (Sl. No. 55.7), 4/97 (Sl. No. 5) and 35/95 (Sl. No. 7).