JUDGMENT

S.N. VARIAVA, J.

This Appeal is against the Judgment dated 27th December, 1999 by the Customs, Excise and Gold (Control) Appellate Tribunal (for short CEGAT), New Delhi.

2. Briefly stated the facts are as follows:

The Appellants are manufacturers, amongst others, of items like bed sheets, bed covers and pillow cases. In this Appeal, we are concerned with the question as to whether the Appellants are entitled to the benefit of Notification No. 65/87-CE dated 1st March, 1987 in respect of bed sheets, bed covers and pillow cases. These items fall under Tariff Item 6301 which consists of "made up textile articles". Under the Notification, these articles have a "Nil" rate of duty "if made without the aid of power". The Appellants had not taken out any license and were not paying duty. They were issued a show-cause- notice as to why duty be not levied on these items and why penalty be not imposed. The Appellants claimed that under the abovementioned Notification these items bore a "Nil" rate of duty and that they were therefore not liable to pay duty. Their case was not accepted on the ground that in the process of manufacturing printed bed sheets, bed covers and pillow cases they mixed colour with the help of colour mixing machine which was operated with the aid of power. The Appellants were therefore called upon to pay duty. Penalty was also imposed on them. The Appeal of the Appellants has been dismissed by the CEGAT by the impugned Judgment.

3. Mr. Bagaria points out that the expression "made up" has been statutorily defined in Note 5 of Section XI as under:

"5. For the purposes of this Section, `made up means:-

(a) Cut otherwise than into squares or rectangles;

(b) Produced in the finished state, ready for use (or merely needing separation by cutting dividing threads) without sewing or other working (for example certain dusters, towels, table cloths, scar squares, blankets);

(c) Hemmed or with rolled edges, or with a knotted fringe at any of the edges, but excluding fabrics, the cut edges of which have been prevented from unraveling by whipping or by other simple means;

(d) Cut to size and having undergone a process of drawn thread work;

(e) Assembled by sewing, gumming or otherwise (other than piece goods consisting of two or more lengths of identical material joined end to end and piece goods composed of two or more textiles assembled in layers, whether or not padded);

(f) Knitted or crocheted to shape, presented in the form of a number of items in the length."

4. Relying upon the statutory definition as made in Note 5 of Section XI noted above, Mr. Bagaria submitted that "made up textile articles" are thus manufactured by the process of cutting, hemming, sewing etc. He submitted that in this process admittedly no power is used. He submitted that mixing of colours has been done for the purposes of preparing cotton/printed fabrics which fall under Tariff Items 52.06 and/or 52.07. He submitted that the use of power is only for manufacturing those items. In support of this he relied upon Chapter note 2 of Chapter 52 which reads as follows:

"2. In relation to products of heading Nos. 52.06 to 52.12, bleaching mercerizing, dyeing, printing, water-proofing, shrink-proofing, organdie processing or any other process or any one or more of these processes shall amount to `manufacture."

5. He submitted that the process of printing of fabrics was statutorily defined as amounting to "manufacture". He submitted that the fact that even those items have a "Nil" rate of duty (under other Notifications) did not detract from fact that the process of printing was for a different excisable commodity. He submitted that after the cotton/printed fabrics are manufactured the "made up textile articles" are then manufactured without the aid of power from those cotton/printed fabrics. He submitted that the Notification exempts "made up textile articles" from payment of duty "if made without the aid of power". He submits that the word "made" refers to the "mad