ORDER
S.L. Peeran, Member (J)
1. Commissioner, in the impugned order, has noted that the Department has not brought any evidence on record that yarn at cops/bobbin stage has been marketed by the assesse. He has held that the single ply yarn obtained on cops/bobbins from the spinning machine when poured (wound) into cones does not bring about any material/substantive change either in the name, character and usage in the substance because the cones received single ply yarn only and yarn remained in single ply yarn form only at all times on cones till its is This is a Revenue appeal against the Order-in-Appeal No. 164/2001(H-I) CE dated 05.09.2001. The marketed. He has held that to make the single ply yarn at cops/bobbin stage marketable, it is wound to cones in single ply yarn which does not result in the emergence of a new product and, therefore, cannot either be called as conversion or captive consumption, as the assessee have not produced any new product therefrom. He has noted that the Assistant Commissioner has already stated that the assessee have already paid duty o9n the cones and has again demanded duty on the yarn at bobbin stage. He has observed that demanding duty the second time on the same material is illogical and amounts to double taxation, which is neither legal nor proper.
2. The revenue is aggrieved with this Order and contend that cotton yarn falling under Chapter Heading 5203 in the form of cops/bobbins are dutiable in terms of provisions of Rule 9 read with Rule 49 of CE Rules. They rely on Chapter Note 1 of chapter 52 of CE Tariff Act which states “in relation to products of Heading No’s. 5203 and 5204, sizing, beaming, warping, wrapping, winding or reeling or any one or more of these processes, or the conversion of any form of the said products into another form of such products shall amount to ‘manufacture’,”. It is stated that since the yar4n in cops/bobbin is wound into cones, it amounts to process of manufacture and hence in terms of Note 1 of chapter 52, they had to be taxed again.
3. We have heard learned SDR Shri L. Narasimha Murthy and Shri A. Krishna Reddy, Consultant for the respondents.
4. Learned SDR relied on the judgment rendered in the case of Shri Ayyappa & Co. Vs. CCE, Coimbatore – 1998 (103) ELT 355 (Tribunal) wherein the process of winding of thread on cones has been held to be a process of manufacture. The Notification No. 46/86 -CE dated 10.02.0986 and 35/95-CE dated 16.03.1995 was held to be applicable to the assessee and this citation does not deal of new goods having come into existence. Hence, we are of the view that this judgment is distinguishable.
5. Learned SDR again relied in the judgment of Birla Transasia carpet Ltd. Vs. CCE, Meerut- 2001 (129) ELT 355 (Tri-Del.) which also deals on the interpretation of Notification No. 26/94-CE. It was held to be not applicable to woolen yarn in plain (straight ) reel hanks after manufacture if converted into cones and removed in cone form for the manufacture of carpets in the factory, in terms of the wordings appearing in the Notification which grants benefit only to ” yarn of wool in plain (straight) reel hanks” whether single/multifold. Since the yarn was not remove in hanks therefore, the benefit was not granted. This judgment is also not applicable.
6. Learned SDR relied on the ground urged in the Memo and fairly admitted to the query from the bench that no evidence of marketability of the goods in the stage of spindles has been brought by the Department. However, he reiterates the findings given by the original authority and seeks for allowing the revenue appeal.
7. Learned consultant pointed out that the single yarn has continued to be single yarn and merely because it has been wound on cop/bobbin stage, that by itself will not make the goods different.
8. It is submitted that there is no evidence produced that the yarn in the spindle stage is marketed. The market buy its only goods which are of sold in cone or any bobbin. He submits that the Tribunal in the case of CCE, Jaipur Vs. Sidha Syntex Ltd. – 1996 (85) ELT 45 (Tribunal) has held that doubling, twisting or manifolding of single ply cotton yarn does not amount to process of manufacture. He also relied on the judgment rendered in the case of Modern Mills Ltd. Vs. CCE, Bombay – 1996 (82) ELT 90 (Tribunal) wherein also it has been held that removal of yarn of bobbins for reeling them on cross reel hanks, cones, plain reel hanks, etc. not tantamount to any transformation from one finished product to another finished product. He submits that the tariff head does not state that the goods are different and required to be taxed. It only speaks about the manufacture but not the goods being liable for tax again.
9. On a careful consideration, we find that the Commissioner (Appeals) has carefully considered all the aspects of the matter and has noted that the Department had not produced any evidence to show that the goods are marketed at spindle stage. He has noted that the goods are marketed only on cop/bobbin stage. He has also noted that the singly ply yarn at cop/bobbin stage alone is marketable and the single ply yarn continues to remain a singly ply yarn. We note that this view has already been expressed by the Tribunal in the case of Modern Mills Ltd. (supra). It is very clear that the goods have remained the same and merely because of the process of winding on cops, the goods do not become different. There is no change in the name, usage or character of the goods. Although the process of winding up the same on the cops/bobbin may be a process of manufacture in terms of note 1 to Chapter 52, but it should result in production of new goods. There are no new goods produced and therefore the Commissioner’s findings that eh goods at the single ply yarn has already suffered duty and it cannot be taxed again is a correct finding. The order is legal and proper and there is no merit the appeal and the same is rejected.