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2018 (9) TMI 892 - AT - Central ExciseClassification of goods - coated fusible interlining fabrics of cotton - Appellants had originally classified the impugned fabrics under Central Excise Tariff Heading (CETH) 5903 consequent to insertion of Note 2(c) in Chapter 59 of the Central Excise Tariff Act, 1985 (CETA) w.e.f. 01.03.1989. The said chapter note was omitted w.e.f. 16.03.1995, subsequent to which appellants sought reclassification of the impugned fabrics under CETH 5207. Whether the goods classified under Chapter 5903 as coated fabrics or in Chapter 52, based on the base textile material contained therein? Held that:- There was no lack of clarity in the de-novo directions at the stage of adjudication. We are then unable to fathom how both the de novo adjudicating authority as well as the lower appellate authority have not bothered to re-examine the matter through the lens of Circular No.5/89 as per the specific direction given to them. On the contrary, these authorities appear to have reiterated the CBEC guidelines contained in CBEC Circular No.433/66/98-CX dt. 27.11.98 which had expounded that omission of Chapter Note 2(c) was neither intended to, nor resulted in, changing the classification of Fusible Interlining Cloth under CETH 5903; that classification of such fabrics may be considered as an exception under Chapter No.2(a) (iv) of Chapter 59 according to which fabrics partially coated or partially covered with plastics and bearing designs resulting from those treatments are excluded from the scope of CETA 5903. The retest reports clearly indicate that the samples of the impugned fabric have characteristics which would fall within the exclusions (i) to (v) of Chapter Note 2 (a) to CETH 59.03. So also, the requirement of “impervious” for the purpose of Board’s telex circular 30.9.88 and Circular No.5/89 dt. 15.6.89 will not then be satisfied. Hence, even based on the output of the retest conducted by the CRCL, New Delhi as per Tribunal’s direction it is clear that the impugned fabric will fall outside the scope of classifiability under CETA 5903. When Chapter Note 2 (c) itself is no longer in existence, and the impugned goods otherwise did not satisfy the requirements laid down in Chapter Note 2(a) read with CBEC circulars (supra), impugned goods will not get classified under CETH 59.03. Appeal allowed - decided in favor of appellant.
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