9911796707
TMI Blog2005 (3) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... dgment per : Ruma Pal, J.]. - The respondent is engaged in the manufacture of Textiles, namely; grey cotton canvas cloth, hundred per cent cotton/grey cotton, belting and duck. The issue to be resolved is whether these goods are classifiable under Tariff Headings (TH) 52.02, 54.08 or 59.09 of the Schedule to the Central Excise Tariff Act, 1985. The appellant contends that they are classifiable under TH 59.09. The respondent on the other hand cleared the goods classifying them either under TH 52.02 or 54.08. Consequently on 23rd September, 1992 24 show cause notices were issued by the Excise Authorities to the respondent to show cause why differential duty amounting to Rs. 545,10,838/- should not be recovered against the clearances effected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... articles of a kind suitable for industrial use 12% (for example, textile fabrics, combined with one or more layers of rubber, leather or other material, bolting cloth, endless felts of textile fabrics, straining cloth) 4.The conclusion in Simplex I was arrived at on the basis that TH 59.09 referred to fabrics for industrial use and that fabrics for industrial use was a specific description and applying Rule 3(a) of the Interpretation Rules, TH 59.09 would prevail over general description of the fabrics as grey cotton fabrics or man-made fabrics under TH 52.05 or 54.08. It was held that TH 59.09 was a specific entry which dealt with fabrics for industrial use and sinc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng, household linen, bedspreads, curtains, other furnishing articles, etc. shall henceforth be classified under Heading No. 59.11 of the CET; B. the grey cotton canvas and grey cotton duck, not having technical uses, shall henceforth be classified under Chapter 52 of CET; and C. the grey cotton belting shall henceforth be classified under heading 59.10 subject to note 6 to Chapter 59." The 1997 Circular virtually reproduced the decision in Simplex I which had held that the respondents' goods were correctly classifiable under TH 59.09 (subsequently numbered as 59.11). 6.Relying on Simplex-I, the Commissioner (Appeals) dismissed the respondents' appeal and the demand for differential duty was confirmed. Subsequent to this, the decision in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Central Excise Tariff. At the relevant time, Section Note 5 defined the word "made up" for the purposes of the entire Section as meaning :- "(a) Cut otherwise than into squares or rectangles; (b) Produced in the finished state, ready for use (or merely needing separation by cutting dividing threads) without sewing or other working (for example, certain dusters, towels, table cloths, scarf squares, blankets); (c) Hemmed or with rolled edges, or with a knotted fringe at any of the edges, but excluding fabrics, the cut edges of which have been prevented from unraveling by whipping or by other simple means; (d) Cut to size and having undergone a process of drawn thread work; (e) Assembled by sewing, gumming or otherwise (other than piec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TH 59.09 requires that it apply to 'made up' goods. Running lengths of unprocessed textiles or non-made up goods therefore would not be covered by this paragraph. 9.Paragraph 'b' of SN-6 also pertains to "textile articles (other than those of heading principles 59.07 and 59.08) of a kind used for technical purposes [for example textile fabrics and felts, endless or fitted with linking devices, of a kind used in paper making or similar machines (for example, for pulp or asbestos cement), gaskets, washers, polishing discs and other machinery parts]". 10.This paragraph of CN-6 also indicates that it refers to 'made up' or processed goods and therefore running lengths or bolts of unprocessed fabric are not covered by TH 59.09. "Endless felts" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon Rule 3. Rule 3 must be understood only in the context of sub-rule (b) of Rule 2 which says inter alia that the classification of goods consisting of more than one material or substance shall be according to the principles contained in Rule 3. Therefore when goods are prima facie, classifiable under two or more headings, classification shall be effected according to sub-rules (a), (b) and (c) of Rule 3 and in that order. The sub-rules are quoted :- "(a) The heading which provides the most specific description shall be preferred to heading providing a more general description. However when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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