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Bhor Industries Ltd. Versus Commissioner of Central Excise, Mumbai

Classification of the side trimmings of laminated, impregnated and coated fabrics - under heading 59.03 or otherwise - clearance by the appellant as waste describing them as foam patti - damaged or sub-standard textile fabrics. - Held that:- We find that the first appellate authority has relied upon the Deputy Chief Chemist s report to hold that these items are classifiable under chapter 59.03. We find that the Chemical Examiner s report is totally inconclusive and in fact in any way supports th .....

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Appeal No. E/1227/05-Mum - A/90755/16/EB - Dated:- 5-10-2016 - Mr. M.V. Ravindran, Member (Judicial) And Mr. C.J. Mathew, Member (Technical) Shri Gajendra Jain, Advocate, for appellant Shri V.K. Agarwal, Additional Commissioner (AR), for respondent ORDER Per M.V. Ravindran This appeal is directed against order-in-appeal No. BR/356/13/M-V/2004 dated 31.1.2005. 2. The appellant herein is engaged in the manufacture of fabrics coated with PVC falling under Heading 59.03 of the Central Excise Tariff .....

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mination as well as foaming, side strips emerge, which are treated by the appellant as waste and identified as foam patti which are sold by the appellant by weight to waste and scrap dealers. The sale price is on the basis of rate per kg. It is the case of the Revenue that the said foam patti is classifiable under Heading 5903 which, according to them, is nothing but damaged or sub-standard textile fabrics and they are required to pay duty on such foam patti . Show cause notices proposed to dema .....

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authority as well as the first appellate authority have again confirmed the demands raised. Hence the matter is being agitated before this Bench. 3. Learned counsel would draw our attention to the fact the lower authorities have not considered their main submission that the order-in-appeal dated 31.1.2005 and the order-in-original dated 28.4.2004, which was passed on remand from the apex court, has gone beyond the scope of the show cause notice as there is no allegation in the show cause notice .....

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ional 2010 (259) ELT 165 (SC). It is his further submission that the adjudicating authority as well as the first appellate authority have ignored the direction of the apex court in remand proceedings. The apex court in the remand proceedings has directed to determine as to whether foam patti is classifiable as laminated textile fabrics or not. Instead of giving findings on the directions of the apex court, both the lower authorities have held that foam patti is chindies after 2.5.1988. Hence the .....

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treated as damaged or sub-standard laminated fabrics. It is his further submission that while filing classification list, the appellant had described the product as foam patti i.e., side strips of width not exceeding 3 cm. It is his submission that this classification list description is not disputed by the lower authorities. He would submit that the contention of the department as to foam patti is to be treated as fabric is unsustainable as foam patti is nothing but waste and scrap generated an .....

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s to be ascertained whether foam patti is the sub-standard fabric or otherwise. It is his submission that the exemption notification cannot be relied upon for creating duty liability as is settled in the case of Kiran Spinning Mills 1984 (17) ELT 396, affirmed by apex court as reported at 1988 (34) ELT 5 (SC). It is his further submission that just because an item is finding mention under the tariff heading, cannot be held liable to duty as it has to be first ascertained whether it is obtained b .....

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actually incorrect, as the test report of the Chemical Examiner only talks about the composition of the samples given for analysis and it does not say that foam patti is a laminated fabric. It is his further submission that foam patti is not known as a laminated fabric in the commercial parlance for which they produced affidavits from various dealers, which are not controverted. It is his further submission that the demand of the duty has been raised by converting the quantity of foam patti clea .....

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products which arises during the course of manufacturing, are squarely covered by the tariff entry 59.03. He would submit that there is no dispute as to the fact that the appellant is manufacturing textile fabrics which are impregnated, coated, covered or laminated with plastics and tariff heading 59.03 talks about the same. He would submit that once there is no dispute that the products manufactured are textile fabrics, the remnants which arise are squarely covered under the residuary heading .....

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ndard textile fabrics. 5. We have considered the submissions made by both sides and perused the records. 6. On perusal of the records, we find that the issue that falls for consideration in this case is regarding the classification of the side trimmings of laminated, impregnated and coated fabrics which are cleared by the appellant as waste describing them as foam patti . 7. The laminated fabrics as manufactured by the appellant which are impregnated, are classified by them under heading 59.03, .....

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ther the products in dispute i.e. foam patti which, according to the appellant, are waste and scrap, are laminated textile fabrics or otherwise . We find that both the lower authorities have not considered this aspect and the direction of the Hon ble Supreme Court in its correct perspective and have held that this form patti are nothing but chindies. In our considered view, in common parlance, chindies are nothing but uneven pieces of cloth that arises during the cutting of the fabrics either in .....

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