ORDER
S.L. Peeran, Member (J)
1. This appeal arises from Order-in-Appeal No. 35/2002 CE dated 8.3.2002 by which the Commissioner (A) has confirmed the order of the Deputy Commissioner confirming demands of duty on waste of synthetic staple fibre generated after they have been carded combed or otherwise processed for spinning. The authorities have taken a view that the said wastes are classifiable under Heading No. 55.06 and 55.07 respectively and chargeable to Central Excise duty. The appellant took the view that the usable waste fibre is not an excisable commodity in view of clear provisions in Note 3 of Chapter 55 of Central Excise Tariff Act, 1985. They also took several other pleas and contended that the items cannot be charged to duty. However, their contentions were negative and the demands have been confirmed besides ordering for confiscation of the goods and imposing redemption fine.
2. The learned Counsel submits that in an identical situation in the case of CCE, Maduari v. Coats Viyella India Ltd. 2006 (197) ELI 534 (Tri.-Chennai), the Tribunal has taken a view that wastes arisen during the course of manufacture of un-processed man-made fabrics are exempted from duty in terms of Notification No. 23/95 CE. He points out that the Revenue appeal had been dismissed and the said ratio would apply to the facts of the present case.
3. The learned JCDR in his usual fairness after perusal of the judgment concedes the position pleaded by the learned Counsel. However, he reiterated the Departmental view.
4. On a careful consideration, we notice that the Commissioner, Trichy dropped the proceedings against Coats Viyella India Limited. The Revenue was aggrieved with such dropping of the fine and filed an appeal before Chennai Bench. The Chennai Bench in the case of CCE v. Coats (supra) after due consideration held that wastes arising during the course of manufacture of non-processed man-made fabrics are exempted from duty in terms of the above stated Notifications. The finding recorded in para 6 is reproduced herein below.
6. We have carefully gone through the case records and considered the submissions. The issue before us is not whether waste which has been cleared was soft waste or hard waste. The issue is whether it is exempt from payment of duty in terms of Notification No. 23/95-C.E., dated 16.3.95. The Commissioner (Appeals) has given clear cut of finding that the waste has arisen during the course of manufacture of unprocessed man-made fabrics which were exempt from duty. Even if waste had arisen before the manufacture of the yarn in an integrated process, where first the yarn is manufactured and then followed by fabrics, one can always hold that the waste had arisen in the course of manufacture of the final product. There is no need to make a fine distinction regarding the exact stage at which waste had arisen. In this view of the matter, we cannot find fault with the finding of the Commissioner (Appeals) that waste had arisen in the course of manufacture of unprocessed man-made fabrics which were exempt from payment of duty. He has rightly allowed the benefit of the exemption Notification. Since there was no mala fide and the entire issue related to interpretation of the notification, imposition of penalty is not justified. In the circumstances, we uphold the impugned order and reject the Revenue’s appeal.
We are of the considered opinion that the ratio of this judgment clearly applies to the facts of the case. Respectfully following the ratio thereof, we set aside the demands and allow the appeal with consequential relief, if any.
(Pronounced and dictated in open Court)