ORDER
T.K. Jayaraman, Member (T)
Page 453
1. Revenue has filed this Appeal against Order-in-Appeal No. 213/98 dated 30.11.98 passed by the Commissioner of Central Excise (Appeals), Trichy.
2. The respondents are engaged in the manufacture of cotton fabrics falling under Chapter heading 52 of the CET Act, 1985. They were clearing the cotton fabrics subjected to the process of scouring without payment of duty under Notification No. 40/95-CE dated 16.3.95. The departmental officers studied the processes undertaken by the respondents and came to the conclusion that they were not entitled for the exemption Notification since they were undertaking certain process not specified in the Notification. A sample of the scoured fabric was sent to the Chemical Examiner who concluded that the fabric could be considered as bleached fabric. The lower authority held that the chemicals used in the processing had imparted a change of lasting character of bleaching and therefore the fabrics cleared under the scoured fabrics were nothing but bleached fabrics and hence exemption under Notification No. 40/95-CE was not available to them. Hence, they confirmed a demand of Rs. 21,83,545/- for the period from 1.9.95 to 3.9.95. The respondents approached the Commissioner (Appeals) who allowed the appeal of the respondents. Revenue is aggrieved over the impugned order of the Commissioner (Appeals) on the following grounds:
2.1. The respondents have explained the sequences of the process of scouring undertaken by them in their letters to the department. After Page 454 going through the letter the Dy. Chief Chemist had given his opinion. He has stated that the fabric in question can be considered as bleached fabric.
2.2 From the report of the Dy. Chief Chemist it is seen that bleaching process has also been undertaken during the process of scouring and singeing.
2.3 In the instant case, after subjecting to the bleaching process in the guise of desizing and chemical padding, with the aid of chemical, the grey fabrics are imparted a change of lasting character of bleaching and they become processed fabrics. Hence the exemption under Notification No. 40/95 dated 16.3.95 as amended would not be available as the said fabrics have undergone bleaching process, a non specified process.
iv) The test report was given to the respondents but they had not contested it within three months from the date of receipt. Respondents have not got this sample in their possession analysed in any laboratory of their choice and submitted the findings of such laboratory for due consideration by the appropriate adjudicating authority. So the observation of the Commissioner (Appeals) that the report of Deputy Chief Chemist cannot be relied upon is not proper and correct in the facts and circumstances of the case. In these circumstances, the Commissioner (Appeals) should have remanded the case to the Assistant Commissioner after a retrest of the sample available with the department/party which he has not done.
3. Ld. SDR , Smt. R. Bhagya Devi appeared for the Revenue and Shri S.P. Thakur, Vice President appeared for the respondents. Ld. SDR took us to through the grounds of appeal and urged that inasmuch as the respondents undertook the bleaching process also, the exemption Notification benefit cannot be given to them.
4. Shri S.P. Thakur, Ld. Vice President urged that the Deputy Chief Chemist has only given his opinion on the basis of the letter given by them and he has not conducted a proper test. Had he conducted proper test for bleaching he could have given a correct test report. Just because certain chemicals used in bleaching have been used it does not mean that the fabrics had undergone a bleaching process.
5. We have heard both sides and gone through the records of the case carefully. The Commissioner (Appeals) has observed that report of the Dy. Chief Chemist shows that he has not tested the sample at all but has based his opinion on the appellants’ letter dated 18.6.96 and the technical literature available with him. There is no indication in the report that he has tested the sample and he has held that the report of the Dy. Chief Chemist cannot be relied upon. The Commissioner (Appeals) has relied on the Tribunal’s order in the case of Shri N. Venkataraman Iyer wherein it has been held that the Chemical Examiner’s province is to furnish the result of his test and it is not his province to give opinion on tariff classification. Further after examining the process undertaken by the respondents the Commissioner had come to the conclusion that the Page 455 bleaching process was not done in respect of the fabrics in question. The process (sic) undertaken were only singeing and scouring which are specified in the Notification. We are in entire agreement with the findings of the Commissioner (Appeals). The report of the Dy. Chief Chemist does not appear to be based on any specific test. It is only an opinion based on the respondents’ letter and the technical literature. In these circumstances we hold that the respondents undertook only the processes specified in the Notification and were entitled for the benefit of the Notification. Hence we dismiss the Revenue’s appeal.
(Order dictated and pronounced in open Court)