Per Mrs. Archana Wadhwa :

The appellants are engaged in the manufacture of "Flocked Fabrics" classifiable under Chapter Heading No. 59.06 of the Central Excise Tariff Act, 1985 for which they were duly licensed under the Central Excises and Salt Act, 1944. For the manufacture of such "Flocked Fabrics", the main raw-material is the textile fabrics and/or waste of fibres. Accordingly, the appellants were purchasing duty-paid man-made staple fibres and/or waste of man-made fibres and were cutting the same into small micro-cut fragments in their factory. Thereafter, the small-cut fragments of the fibres were being subjected to certain processes such as washing, drying to remove impurities, dyeing to render its required shade, washing and drying again, sifting for sizing and sorting, moistursation to improve its utility, performance or serviceability in order to render those suitable for the manufacture of "Flocked Fabrics" in the appellants' factory. Sometimes, the appellants also purchased textile fibres not exceeding 5mm in length (Flock) from the open market and then subjected the same to the processes, as above, in order to render the same suitable for the manufacture of "Flocked Fabrics" in the factory of the appellants. Such micro-cut fragments of length less than 5mm are classifiable under Tariff Heading: 5601.00. Dispute as regards the excisability of the Flocks as also as regards the stage of their excisability, was going on between the appellants and their jurisdictional Central Excise Department for a long time even prior to the coming to existence of Central Excise Tariff Act, 1985, which has resulted into passing of an earlier order by the Assistant Commissioner wherein he had fixed the stage of RG-I in respect of such Flocks when such micro-cut fibres were stored in the Air-Conditioned Rooms. The said order of the Assistant Commissioner was challenged by the appellants before the higher appellate authorities and travelled upto the Tribunal where their Stay Petition was disposed of by the Tribunal vide order dated 8.5.91 staying the operation of the said order of the Assistant Commissioner.

2. Subsequently, the appellants instead of buying the fibres in running length and cutting them in their factory into micro-cut fragments, started buying "Flocked Fibres" from the open market. Such "Flocked Fibres" already cut into micro-cut fragments not exceeding 5mm in length were then subjected to the processes of washing and drying, dyeing, washing and drying again, sifting for sizing and sorting and then moisturisation in the air-condition rooms in gaining the requisite moisture in their factory.

3. On the appellants' approaching the Central Excise Officers seeking their guidance for the excisability of such flocks bought by them from the market, they were directed by the Superintendent of Central Excise vide his letter dated 28.6.90 as under:-

"Unprocessed cut-fibres should be entered in the Form-IV register first and after completion of processing it should be entered in the RG-I at the stage as fixed by the Assistant Collector, CE, Cal. "G" Division vide his Adjudication order No. 3 (5601) (17) of 90/AC dated 19.2.90 issued under C.No. V (5601) (17) CAL:G/86/635 dated 21.9.90 and after paying proper Central Excise duty on the said processed fibres (Flocks), the same shall be used for flocking on the fabrics/on the base material."

4. Being aggrieved with the above order of the Superintendent, the appellants filed an appeal before the Commissioner of Central Excise (Appeals) who vide his order dated 12.6.91 rejected the same. Hence the present appeal before us.

5. Appearing on behalf of the appellants, Shri K.K. Bhattacharjee, learned Consultant assisted by Shri M.S. Dey, learned Advocate, submitted that the only point required to be decided in the instant appeal was as to whether the process of cleaning, washing, drying and air-conditioning of the bought-out Flocks would amount to the process of manufacture for the purposes