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TMI Blog2011 (6) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... Penalty : Rs. 2,50,000/- u/R-25 Personal Penalties : Rs. 1,00,000/- on Shri Sharad Bidye, Auth. Signatory u/R-26 Rs. 2,50,000/- on Shri D.R. Mehta, Director, u/R-26 Personal Penalties : Rs. 50,000/- on Shri Sharad Bidye, Auth. Signatory u/R-26 Rs. 1,00,000/- on Shri D.R. Mehta, Director, u/R-26 2. The dispute in the present appeals relates to the product being manufactured by the appellants. Whereas the Revenue has held that the appellant s product is Lace falling under Chapter heading 58.04, the appellant s contention is that the same is Braids in the piece falling under heading 58.08. The two contending tariff headings are as under:- 58.04 58.08 Tulles and other net fabrics, not including woven, knitted or crocheted fabrics; lace in the piece in strips or in motifs, other than fabrics of heading No. 60.02 In or in relation to the manufacture of which any process is ordinarily carried on with the aid of power or steam. Braids in the piece; ornamental trimmings in the piece, without embroidery, other than knitted or crocheted; tassels, pompons and similar articles 3. Before we decide o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ace in the piece manufactured without embroidery, which is not subjected to any process and the above product can be classified under Section 58.08 of Central Excise norms. A small portion of the submitted samples is enclosed herewith in the form of Pattern Card for reference. Based upon the above, the Deputy Commissioner of Central Excise Vapi, vide his letter dated 31.10.2002 informed the appellant that the Commissioner of Surat has approved the recommendations of that office and has been pleased to accord sanction to classify their product under heading 58.08.10 of Central Excise Tariff Act, 1985. The letter also mentioned that in future, the appellant may classify their final product accordingly and their application stands disposed off. 5. However on prima-facie observation of the manufacturing process of the product in question, the department observed that the Braided Laces, manufactured on the Lace braiding machines were interlaced/ interwoven with the nylon threads along their length to given firmness/ better shape to the edges which were subjected to a further process on Bobbin Lace Separating Machine for slitting & removing of nylon threads from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfied with the above investigation and the sample testing, they sent a representative sample of the product to the chemical examiner of Central Excise and Customs laboratory, Vadodara under a test memo dated 01.4.2004 for examining as to whether :- (i) The design element was worked on a pre-existing ground or otherwise. (ii) Was it an open work fabric in which design element formed by inter twisting of threads are joined by meshes. (iii) The product was Braids or Laces. The Chemical examiner, Central Excise & Customs Laboratory, Vadodara, sent his test report vide his letter dated 30.4.2004, which reads as under: Each of the 11 samples are small cut Pieces of While Textile Articles Laces made of Cotton. Each has flat braided structure. The openness and ornamentation is produced by selective inter-twisting of the yarns within the structure. (marked as P-150, P-121, P-169, P-270, P-132A, P-172, P-389, P-474, P-701, P-484), No pre existing ground is present in each case. Design element formed by inter-twisting of treads is not joined by meshes in each case . 8. Further, the samples were sent by the Revenue to one Shri B. Basu, who re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pealed against by the Revenue. The said order of the Commissioner are the subject matter of the present appeals. 10. Ld.Advocate appearing for the appellant has raised the following grounds in their defence. a) Braids under HSN Explanatory Notes under Heading 58.08 are described as products obtained by interlacing diagonally yarns, or the monofilament strips. In braids, half of the threads run in one direction and half in other and interlaced accordingly to fixed pattern which is usually quite simple. In some braids, extra threads may be interlaced to give firmness to the edge or in any sequence to produce pattern effects. b) From the above, it is seen that the braids have a definite structure resulting from diagonal interlacing of threads. This definition is clearly applicable to the disputed product in the light of the Chief Chemical Examiner s categorical opinion that the products had a flat braided structure . c) The above opinion is further reinforced by the fact that the disputed product is obtained on HAKOBA LACE BRAIDING MACHINE SKZ-8 which are bobbin lace machine, employing the braiding principle. In other words, the products obtaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding which provides the most specific description. Since in the present case, it is not in dispute that the disputed products are braided lace, manufactured on a Braiding Machine and obtained on braiding principle, they are appropriately classifiable under Heading No.58.08 as braids and not as laces of Heading No.58.04. i) Further, even if Rule 3(a) is not considered to be applicable, then recourse can be made under Rule 3(c), [the intervening Rule 3(b) is not applicable since issue does not involve any matter concerning the composition of materials of the final product], which provides that when goods cannot be classified by reference to (a) or (b), they shall be classified under the Heading which occurs last in the numerical order among those which equally merit consideration. As in this case, the Heading 58.08 is the last in sequence, it will be the appropriate heading for classification of the disputed product. j) That the ld.Commissioner has failed to appreciate that even if there is possibility of taking two views on the classification, the one in favour of the appellant/assessee should be given preference. Consequently, the impugned order is liable to be set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sting of the yarn within the structure. No pre-existing ground is present in each case. The design element formed by inter twining of thread are not joined by meshes in each case. As against above, the opinion of Shri Basu is to the effect that the two different design elements for the same product are joined by meshes. As such submits the ld.Advocate that the opinion of Shri Basu is contrary to the opinion of chemical examiner. Further, we find that Shri Basu is B.Sc. (Technical) in Textile Technology and was former Additional Commissioner of Customs & Central Excise and his opinion has been relied by treating him as an expert. We are afraid to observe that merely because he as B.Sc. in Textile Technology, by itself, will not elevate his opinion to an expert s opinion. Further, as rightly contended by ld.Advocate, he being a former Additional Commissioner of Customs & Central Excise, his opinion cannot be held to be unbiased. In any case, we find that the opinion of SASMIRA being in favour of the assessee as also the opinion of Dy.Commissioner, conveyed during the visit to the factory and subsequently conveyed holding the goods to be braids being in favour of the assessee, have to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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