TMI Blog1983 (7) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... ts M/s. Arvind Mills Ltd., Ahmedabad manufacture handkerchiefs out of cotton fabrics manufactured by them. The Superintendent of Central Excise who examined the issue of classification and assessment of handkerchiefs decided that handkerchiefs should be classified under Item No. 68 and assessed at the rate of 1% with effect from 1-3-1975. He accordingly issued demand for payment of Central Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellate Collector of Customs likewise ruled that handkerchiefs are an identifiable commodity by its name and by its use and accordingly rejected the appeal. 2. In their appeal to the Tribunal, the Advocate for the Appellants has forcefully argued that handkerchiefs are covered by Item 19 of the CET. The trade and the manufacturers have treated and considered handkerchiefs as cotton fabrics ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime......... 3. The advocate for the appellants in this connection also made a reference to Tariff Item 22 and Notification No. 109/75, dated 20-4-1975 according to which art-silk fabrics specified in the schedule to the Notification have been exempted from the whole of the additional duty of excise leviable thereon. The Entry No. 3(c) specifically mentions the Item handkerchiefs as one of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay that the circulars of the Central Board of Direct Taxes are legally binding on the revenue even if they are found to be not in accordance with the correct interpretation of the statute and they clash or deviate from such construction. The Hon ble Supreme Court has also relied on the decision in Navnit Lal Zaveri reported in 1956 ITR 198 and the decision of Ellerman Lines Ltd. 1982 ITR 913. He, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , however, contended that since the handkerchiefs have been stitched at the end, they have undergone further manufacture and accordingly should more appropriately fall under Item 68. He stated that he has been authorised by the Central Board of Excise and Customs to take this stand even though it is in direct contradiction of the Tariff Advice issued by the Board. 4. The Bench has carefully con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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