TMI Blog2018 (2) TMI 1439X X X X Extracts X X X X X X X X Extracts X X X X ..... 85. The SCN alleges that the respondent clears PU foam sheets and polyester granules (for laminating the PU foam) to their job workers who convert the granules into yarn and knit the yarn into fabrics and use it to laminate the PU form sheets. In fact, the respondent clears PU foam to their job workers who cut the same into the required size and laminate the PU foam on textile fabric. The respondent does not send any polyester granules to the job worker. After lamination the product cleared from the job worker is called as textile fabric laminated with PU foam and not PU material laminated for textile as contended in the SCN. Appeal dismissed - decided against Revenue. - E/385 & 386/2010 - Final Order Nos. 40431-40432 / 2018 - Dated:- 21-2-2018 - Ms. Sulekha Beevi C.S., Member ( Judicial ) And Shri Madhu Mohan Damodhar, Member ( Technical ) Shri R. Subramaniyam, AC ( AR ) for the Appellant Shri R. Janardhan Pillai, Consultant for the Respondent ORDER Per Bench Revenue is in appeal against the order passed by Commissioner (Appeals) who held the classification of product manufactured by appellant to fall under Heading 5903 of CETA, 1985. 2. Brief fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Commissioner of Central Excise, Bangalore 1999 (106) ELT 557 (Tri. Chennai). That the product in question in that case was manmade fabric and cotton fabric coated with PU foam used as fabric in the manufacture of shoe uppers. The goods in question in the instant case is PU foam sheets laminated with textile fabric knitted out of polyester granules used in the manufacture of car seats. The Tribunal in the said case held that the functional character of the article was that of textiles and not of plastics as the goods in question were used for shoe uppers and therefore classified under 5903. In the instant case, the functional character of the article is for making car seats. That therefore the said case is distinguishable on facts and has been wrongly applied by Commissioner (Appeals). 3.2 Further, the Commissioner (Appeals) has relied upon the test report of the Chemical Examiner, Customs House, Chennai wherein it was stated that the percentage of fabric contained in the impugned goods was about 200% more when compared to the content of PU foam. That even if the predominant content is fabric, Section Note 1(h) of Section XI (Textile and Textile Articles) clearly states that Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om premises of job worker. The description of the goods in the letter was shown as textiles laminated with PU foam. Thereafter show cause notice has been issued dated 5.5.2006, in which there is no proposal for reclassification of the product. That on this ground itself demand cannot sustain. 4.2 The product in question is used as cover for car seats by the manufacturers of car seats. The Commissioner (Appeals) has discussed in detail to arrive at the conclusion that the products fall within Chapter 59. The original authority in the denovo proceedings had sent the product for further testing by the Chemical Examiner at Custom House, Chennai. The gist of the report showed the percentage of fabric to be much higher than that of the percentage of foam. Thus, the predominant content is fabric and not plastic. The earlier chemical test report as well as report of SITRA was in favour of the respondents. The original authority had ignored these test reports. The Commissioner (Appeals) has rightly relied upon the test reports as well as the decision of the Tribunal in the case of Triton Synthetic Fibres (P) Ltd. (supra) on identical set of facts. Further, the Board Circular dated 13.12. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al to the issue at hand. It is stated in the circular that the process of manufacturing PVC leather cloth involves coating of a paste of plastic material (PVC) on one side of the base fabric. In this case, the plastic is not combined with the textile but is coated on textile fabric to form final product. Textile fabrics does not act as reinforcing material. Such fabrics are used for upholstery and can take sharp bends without cracking. After analyzing the applicability of Chapter Note 2(a) of Chapter 59, Section Note 1(d) of Section XI as well as Chapter Note 2(k) under Chapter 29 together with the HSN Notes, the Board has concluded that the product PVC leather cloth also known as rexine cloth has to be correctly classified under Chapter 59.03 of CETA, 1985. 10. The sample of the impugned product was produced before us. On examining the same, the PU foam sheet is actually on the bottom side (only one side) of the fabric. This is the main ground on which the department contends that the fabric is only for reinforcement. The article can be used for cover of car seat or upholstery. The Board Circular clarifies that such fabrics are not hit by Chapter Note 2(a)(5) to Chapter 59. Fur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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