ORDER
P.C. Jain, Member (T)
1. Briefly stated the facts of the case are as follow :- On 31-7-1987 Central Excise Officers visited the factory of the appellant herein and found that they were manufacturing woollen pile knitting fabric described by the appellant as cotton hosiery knitted fabric. The process of manufacture as described by the appellant’s Director in the course of statement recorded from him is that two threads one of cotton and another wool are stitched & knitted and the woollen thread comes up in the form of pile. This was believed by the Central Excise Officers that the fabric manufactured by the appellant fell under Tariff Heading 6001.19 described as knitted or crocheted fabric of other than cotton or man-made textile materials. It was also recorded in the statement that the appellant were undertaking tumbler dry process before the goods were sent to their customers. This process of tumble dry is being carried out with the aid of power. A show cause notice was, therefore, issued to the appellant asking them as to why a duty of Rs. 2,51,083.19 should not be recovered from them for the period 1-3-1986 to 31-7-1987. Show cause notice was dated 14-6-1988.
2. On adjudication the Additional Collector of Central Excise has upheld the classification of the fabric under Tariff Heading 6001.19 and has also denied the benefit of Notification 109/86-C.E. It has been treated as a pile fabric. Applying the provisions of Section Note 14 of Section XI, the contents of base fabric have been ignored in terms of Section Note 14(f3). The pile admittedly being of woollen yarn, it has been treated to fall under Tariff Heading 6001.19. The tumbling dry process has been taken as a manufacturing process was being liable to duty and therefore, corresponding rate as applicable to woollen fabric under Tariff Heading 51.07 has been made applicable the product and the duty has been demanded.
3. A stay application in the instant appeal was filed to the Tribunal and it was stated before the Tribunal at the time of hearing of said application that no sample was drawn and sent to the Chemical Examiner. It had been the contention of the appellant that the product did not have any base fabric. In the absence of the base fabric the provisions of Section Note 2 of Section XI of the Central Excise Tariff had to be applied and going by that the corresponding provisions of Chapter 52 would be applicable inasmuch as the cotton predominated in the entire fabric. The percentage of cotton having been declared in the statement as 53% and the remaining percentage 47 was declared as wool. A sample was thereafter sent on the direction of the Tribunal to the Chemical Examiner and a report has been given. The composition of the fabric is as follows :-
1. 51.7% Cotton 2. 7.4% Viscose 3. 41.9% Wool The Chemical Examiner has described the fabric with pile manufactured of wool.
4. Ld. Advocate Shri J.P. Kaushik has urged that a specific query was made to the Chemical Examiner to find out whether the product has a base fabric or not. That query has not been replied to by the Chemical Examiner. Ld. Advocate, therefore, submits that absence of reply from the Chemical Examiner supports their case that the product does not have a base fabric and, therfore, the predominence of the fibre will determine the classification of the prodcut. The predominence of cotton fibre being there, even as per the report of the Chemical Examiner, the product should be classified under Tariff Heading 52.05. This heading has been suggested further because the process of tumbling dry is not a process of manufacture. It does not change the character of the fabric. It merely dries the moisture and, therefore, the correct heading as suggested above is 52.05. He further submits that going by this heading there is no liability of duty as it carries nil rate of duty in terms of Notification 109/86.
5. Opposing the contentions, ld. JDR, Sh. A.M. Tilak reiterates the findings of the Adjudicating Authority as already set out above.
6. We have carefully considered the pleas advanced from both sides. We are not inclined to agree with the submissions of the ld. Advocate that the fabric does not have a base. The product has been described by the Chemical Examiner as knitted pile fabric. It has also been described by the Director in the statement recorded by the Central Excise Officers that a woollen pile comes out from the cotton base. In any case a pile will have to be on a base and, therefore, we hold that the classification under Tariff Heading 6001.19 is appropriate in the present facts and circumstances of the case relying on the provisions of Section Note 14 of Section XI of the Central Excise Tariff. Next question before us is whether the fabric is a processed fabric or not. In this connection, ld. Advocate has submitted that the process undertaken by them does not bring into existence a new commodity. It cannot be treated as process of manufacture. It merely dries knitted fabric. For this proposition ld. Advocate relies on Larger Branch judgment of this Tribunal in the case of Adreena Industries v. CCE, Chandigarh – 1987 (28) E.L.T. 364 wherein it has been held that the process of drying is not a process of manufacture even if power is uded in relation thereto. As against the above contention, the lower authority has held that tumbling dry process is a process of manufacture. On careful consideration of the pleas advanced from both sides, we agree with the submissions of the ld. Advocate that tumbling dry process does not bring into existence any new commodity. Reliance placed by the ld. Advocate on Tribunals judgment in the case of Adreena Industries is well taken and following the same way hold that the fabric under consideration is not a processed fabric. Consequently the product will be entitled to the benefit of Notification 109/86-C.E. read with Tariff Heading 52.05 because in the fabric as a whole cotton fibre predominates and the explanation to the Notification 109/86 comes into play for the purpose of determining the rate of duty under the Notification. Since we have held that the benefit of Notification 109/86-C.E. is applicabe to the product under consideration during the relevant period the demand of duty is set aside.
7. In view of our decision as aforesaid we do not consider it necessary to look into the question whether the demand is time barred or not.
8. In view of the aforesaid discussion there is no case for imposing any penalty. Therefore, we set aside the same. Appeal disposed of in above manner.