Per T. Anjaneyulu : Heard both sides.

2. The revenue is in appeal against an Order dated 21.09.2004 passed by the Commissioner (Appeals), Central Excise, Mumbai-IV.

3. The issue involved in the appeal is classification of goods and payment of duty thereon.

4. The brief facts of the case are that the respondent unit is engaged in the Processing/Manufacture of yarn of various types including multifolded yarn. The same is manufactured by passing two or more than two yarns through water and/or Airjet in machines wherein filaments of input yarns are mingled together with Pressure of Air. Thereafter the same are passed through stabilizing zone (heater) and wound on cops.

5. The disputed goods of the respondent unit were treated as an exempted product by the central excise authorities and was considered to be not a 'texturised yarn' on the basis of various test reports of departmental Dy. Chief Chemist of SASMIRA till October, 2000. However, in October 2000, the excise authorities took samples of above product again and send it to VJTI and SASMIRA for analysis. VJTI, vide its test report of November 2000 concluded that the sample was "texturised yarn". On the basis of this report alone the department then directed the appellants to classify their product under Chapter sub-heading No. 5402.31 and 5402.32 not eligible to any exemption.

6. The respondent accordingly filed classification declaration No. 1/2000-01 with effect from 12.12.2000 classifying their product is texturised yarn of Nylon or other Polymides under Sub-heading 5402.31 and texturised yarn of Polyester under 5402.32 liable to excise duty at appropriate rate and at the same time contending that these two products are actually multifolded yarn of Nylon and Polyester classifiable under sub-heading 5402.61 and 5402.62 attracting Nil rate of duty and duty was paid "under protest". Subsequently they filed another classification declaration w.e.f. 25.01.2001 classifying their product under sub-heading No. 5402.61 and 5402.62. They have further filed two more classification list w.e.f. 01.03.2001 and 01.04.2001 under the same sub-heading. In the aforesaid circumstances the Divisional Dy. Commissioner, vide letter dated 04.09.2001 directed the appellants to classify their product under 5402.31 and 5402.32 as per their first classification declaration as the matter is under investigation.

7. Being aggrieved by the letter dated 04.09.01 of the Dy. Commissioner, Central Excise, the appellants preferred an appeal to the Commissioner (Appeals), Mumbai. The Commissioner (Appeals), vide his Order dated 07.05.2002 held that the multiple folded yarn manufactured by the appellant merit classification under chapter sub-heading 5402.61/5402.62 of CET and set aside the letter issued by the Deputy Commissioner of Central Excise.

8. Aggrieved by the aforesaid order, the department through Commissioner of Central Excise, Mumbai-IV filed an appeal before the Tribunal (CEGAT, WZB). Thereupon the Tribunal has directed the Commissioner (Appeals) to re-decide the classification issue after taking on record the results of completed enquiry mentioned in letter dated 04.09.2001 and hearing both sides and thus allowed the appeal in remand. Thereupon the Commissioner (Appeals) vide Order dated 21.09.2004 decided the matter in favour of respondent by allowing their appeal and setting aside letter dated 04.09.2001 issued by the Deputy Commissioner. Hence this appeal by the Revenue.

9. The department has raised the following contentions:-

(a) The Commissioner (Appeals), Central Excise, Mumbai is not discussed as to how and why the yarn manufactured by the respondent unit is not texturised yarn but multifold yarn. He has not brought forward any technical ground to arrive at the conclusion that the yarn manufactured is multifolded yarn.

(b) The manufacturing process of multifolded yarn which actually is "Texturised Yarn", is described in the Flow Chart of production process submitted by the respondent unit. Acco