Government of India
Department of Revenue
Central Board of Excise & Customs
Subject: Central Excise- Garnetting/ Carding processes on waste of filaments/ waste of staple fibres falling under Chapter 54 and 55 of CETA, 1985- Whether amounts to manufacture within the meaning of Section 2(f) of the CESA, 1944-Clarification regarding……..
Doubts have been expressed as to whether Garnetting/ carding processes carried on waste of filaments/ waste of staple fibres amounts to manufacture within the ambit of Section 2(f) of the Central Excises and Salt Act, 1944 and whether central excise duty will be attracted at more than one stage on such processed waste under heading 55.03 of the Schedule to be paid again if duty paid wastes are subjected to process of garnetting and carding both.
2. The issue has been examined by the Board. It is observed that the terms “garnetting” and “carding” have been defined as under –
Garnetting – The process of recovering fibres from hard twisted thread waste, rags, clippings, etc. especially of wool. The object is to thoroughly break up the material and return it to a fluffy fibrous condition so that it may be reused in blends or in some cases alone (Indian Standard Glossary of Textile Terms Natural Fibres- 232-1967) as quoted by Tribunal in its judgment reported in 1989(42) ELT – 734 (Tribunal).
Carding – In carding, staple and waste fibres are passed through machines which render the fibres more or less parallel and deliver them in the form of a wide wed or lap which is then generally condensed into sliver (HSN page 762).
The garnetting / carding machines are thus basically used for the purpose of disentangling the waste of filaments/ waste of staple fibres.
3. There is however, no definition in the Tariff to the effect that garnetting or carding would amount to manufacture. It is further observed that Board, vide its Circular o. 23/90-CX.I dated 1.11. 1990, had clarified that fibres obtained from synthetic wastes may not conform to the technological requirements of standard staple fibre, as they are not of uniform length.
4. Tribunal, in their judgement in the case of Collector of Central Excise v. Amritsar Swadesi Woolen Mills- 1989 (42) ELT 734 (Tribunal) have held that garnet machine is a type of carding machine containing re-rollers and cylinders covered with metallic teeth of a saw which is used to card or garnette soft and hard wastes.
5. Board is, therefore, of the view that the processes of garnetting and / or carding of duty paid waste of filament/ waste of staple fibres falling under Chapters 54 and 55 of the Schedule to the Central Excise Tariff Act, 1985 do not amount to manufacture within the meaning of Section 2(f) of the Central Excises & Salt Act, 1944 and , therefore, and further duty shall be leviable on material arising out of such garnetting or carding.
6. All pending assessments/ disputes of this nature may be finalised accordingly.