ORDER
Jyoti Balasundaram, Vice President
1. The issue for determination in this appeal is whether the process of washing acrylic knitted fabric cut to size, and packing them in polythene bag bearing the name “Stay Free Washable Cover”, on job work basis for M/s. Johnson & Johnson Ltd., amounts to manufacture resulting in a new product falling classification under CETA subheading 5601.22. According to the appellants the process carried out by them do not amounts to manufacture.
2. We have heard both sides. We find that M/s. Johnson & Johnson purchased acrylic knitted fabric from their manufacturer, who has classified them, under CETA sub-heading 6002.20 and supplied them to the appellants, who washed them with Excel brand detergent, dried and folded them to the required size and packed them in a plastic bag with a monogram “Stay Free Washable Cover” as well as the “Sanitary Napkin Cover”.
3. According to the department, the product became ready for specific use for ladies only after the process carried out by the appellants and was therefore leviable to duty as wadding of man made fabric under CETA sub-heading 5601.22. The Commissioner (Appeals) has relied upon note 4 to Chapter 60 of the schedule to the CETA, 1985, which states that “in relation to the products referred to in this Chapter, bleaching, mercerising, dyeing, printing, water-proofing, shrink-proofing, tendering, hear-setting, crease-resistant, organdie processing or any other process or any one or more of these process shall amount to manufacture” and has yet classified the product in dispute under Chapter leading 56.01. It is to be noted that washing is not a process of manufacture even as per the above note. Be that ask may, we have to first determine whether the processes earned out by the appellants amount to manufacture and only if the answer is in the positive, does the question of classification arise. The product in question is a washable cover for women of the lower strata, who use home made sanitary napkins, as they cannot afford to purchase sanitary napkins. The cover can be washed up to 90 times as seen from the packing of the cover. The inherent characteristic of the product namely, absorbency remained the same even after washing, drying, folding and packing. Hence, no new product comes into existence. Even without putting the acrylic knitted fabric in a printed polythene bag, it can be used for the same purpose i.e. as a cover for sanitary napkin.
4. The emphasis placed by the Ld. SDR in his argument before us that washing of the cover is very essential for hygiene is misplaced, as the cover is to be washed by the user after use and the cover can be washed up to 90 times. There is no note in Chapter 56 (or even in Chapter 60 for that matter) that washing, drying and packing are deemed to amount to manufacture. Therefore, the conclusion arrived at by the authorities below that the process of washing and packing amount to manufacture cannot be sustained, particularly, in the light of the Apex Court judgment in UOI v. J.G. Glass Industries Ltd., (1998 (97) ELT 5(SC), wherein the Court held that putting of a brand name, such as Coca-Cola, Pepsi, etc. on the original glass bottles did not result in creation of a new product.
5. For the above reasons, we hold that the appellants did not carry out any manufacture, and therefore, set aside the impugned order and allow the appeal.
(Pronounced in Court)