ORDER
V.K. Ashtana, Member (T)
1. The Final Order Nos. 1241 & 1242/98, dated 30-6-1998 on these two Revenue appeals was recalled vide Misc. Order Nos. 680 to 682/99, dated 23-7-1999 and the matters were reheard on 24-8-1999 by this Bench.
2. Heard Ms. Aruna Gupta, ld. DR and Shri S. Kandaswamy, ld. Consultant for respondents M/s. Singaravelar Spinning Mills (P) Ltd. and Shri V.S. Venugopalan, ld. Advocate for M/s. Lakshmi Saraswathy Cotton Mills (P) Ltd.
3. Ld. DR reiterates the grounds of Revenue’s appeals and submits that since carded/combed cotton was specified as under 5202 under Rule 57Q and since this was deleted only by Notification No. 60/94-C.E. (N.T.), dated 21-10-1994, therefore before that date no Modvat credit would be available on carding/combing (preparatory) machines which produced such cotton carded/combed falling under 5202 and being fully exempted . The said notification could not be given retrospective effect as it introduced substantive changes in Rule 57Q and therefore was not clarificatory. Hence, the appeals were required to be allowed.
4. For Appeal No. E/1207/96, ld. Consultant submits that the issue involves eligibility of Modvat credit on following items for the/period from 30-9-1994 to 7-10-1994 involving amount of Rs. 1,37,200/- :-
Carding Machine Rs. 8445.00 Speed Frame Machine Rs. 8445.00
The credit thereon was taken after 21-10-1994. Since date of receipt is not mentioned in Rule 57Q, therefore credit was rightly taken and cites this Tribunal’s Final Order No. 503/98, dated 25-2-1998 in their own case, where matter was remanded on this issue. He also submits that in the Tribunal’s Final Order No. 531 /99, dated 8-3-1999 the issue of eligibility of Modvat on Speed Frame/Ring Frame were remanded to original authority in the case of Pongalur Pioneer Textiles, and prays for similar decision here. Thirdly, he cites this Tribunal Final Order No. 346/99, dated 12-2-1999 in the case of Best Cotton Mills wherein the issue of whether cotton combed/carded was marketable and hence ‘goods’ was remanded to the original authority for reconsideration. Since that was the central issue herein, a similar decision was prayed for. This onus was on department. Fourthly, he submitted that in view of decision in case of Hematic Motor as in 1997 (91) E.L.T. 592 (Tribunal) all Modvat Rules should be read together. Thus as held in the case of MM Forgings as in 1997 (89) E.L.T. 617 (Tribunal) the Rules 57Q and 57S should be read harmoniously and Notification No. 60/94, dated 21-10-1994 be applied retrospectivily.
5. Ld. Advocate Shri Venugopalan for respondents in Appeal E/1255/96 explained to us at great length the various stages in the manufacture of yarn. Blow-room and carding/combing operations which led to emergence of slivers was preparatory stage. Such carded/combed cotton was merely rearranged and cleaned cotton fibres and since these slivers had not strength, they could not be transported over long distances. Hence, they were not ‘goods’. These slivers were then given slight twist in simplex machines and then wound on bobbins. The examples of marketable goods led in order-in-original etc. were for such bobbins which was different from cotton combed/carded. He further submitted that the matter regarding marketability of such cotton carded /combed was therefore remanded to original authority in our decision in case of Best Cotton Mills (supra), hence the ratio thereof would be required to be followed here also. He also made other submissions were similar to those recorded above.
6. We have carefully considered the rival submissions and records of the case. We find that the earlier final orders were recalled due to mistakes apparent on record and therefore our reconsideration thereof must ensure that those mistakes are rectified. The matter concerning credit on speed frames etc. which are post-preparatory machines was considered by this Tribunal in the case of Pongalur Pioneer Textiles (supra) and the matter was remanded. Following the ratio of the said decision so that judicial discipline is respected, we find that for such post-preparatory textile machines and parts thereof, the matter is to be similarly remanded.
7. With respect to preparatory machines like carding/combing machines and parts thereof, the issue necessarily hinges on whether upto 21-10-1994 cotton combed/carded is regarded as ‘goods’ or not. For this a considered evaluation of evidence on its marketability is to be done. For this purpose, the issue was remanded in our final order in case of Best Cotton Mills (supra). Therefore, following the ratio thereof, we find the matter needs to be remanded in this case also.
8. In view of the aforesaid findings, we set aside the orders-in-appeal impugned. With respect to carding/combing machines and their parts and also speed frames and their parts and remand these matters to the original authorities in terms of our final orders noted above. The original authorities shall consider all aspects of the matter in these de novo proceedings and shall pass speaking orders after hearing the assessees.
9. The Revenue appeals are allowed by way of remand.