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TMI Blog2003 (2) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... ri B.L. Narasimhan, learned Advocate, submitted that the Appellants are engaged in the manufacture of wax treated cotton canvas cloth and tarpaulins stitched therefrom; that the wax is melted and mixed with other raw materials and then is shifted to the wax dipping machine; that the grey cloth is passed through the mix and the cloth picks up the wax; that the Collector has classified the tarpaulin cloth under Heading 59.06 holding that cloth is nothing but a coated/impregnated cloth which is evident from the process of manufacture undertaken by the Appellant and the impregnation/coating or covering is visible with the naked eye. The learned Advocate, further, submitted that Note 4 to Chapter 59 provides that Heading 59.06 does not apply to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Chemical Examiner who opined that it was yellow colour woven fabric composed of cotton base fabrics coated/impregnated with the preparation of waxy matter and the coating/impregnation could be seen with the naked eyes. But his report was admittedly not accepted by the appellants and retesting of the samples drawn was got made from the Chief Chemist, Central Revenues, Delhi. He examined three samples and opined that each of the three samples, was treated by impregnation with the preparation of waxy matter and aluminium stearate but interstices between the yarn were not completely filled, light could pass through interstices wrap and weft yarns of the fabrics in each of the samples were visible with naked eyes. He did not endorse the opi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ., dated 18-10-1996 that the classification of the Tarpaulin cloth may be decided on the basis of facts and circumstances of each case keeping in view the visibility criteria; that as per the process of manufacture, the cloth is not only dipped in the tank but passed through two rollers and squeezed to the required thickness; that the coated fabric thus obtained is having a layer which is visible to the naked eye; that even Chief Chemist had opined that the sample was treated by impregnation with the preparation of waxy matter; that Chemical Examiner had stated in his report dated 18-9-92 that the coating/impregnation can be seen with the naked eye; that thus the tarpaulin cloth is appropriately classifiable under Heading 59.06 of the Tarif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the yarns are not completely filled, light passes through the interstices, warp and weft yarns of the fabrics are visible with naked eyes". The learned Advocate has thus rightly pointed out that once the warp and weft yarns of the fabrics are visible and light passes through the interstices, it cannot be claimed that there was a visible formation of layer on the surface of the fabric. The Board in another Circular dated 18-10-1996 has reiterated that "a visible layer is different from uneven residues and patches, and it should be a uniform coating visible by the naked eye otherwise than through a change of colour." It is also mentioned in the said circular that water-proofed fabrics are specifically mentioned under Chapter 52 of CETA - unl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng used regularly. We are thus of the view that Revenue has shown the use of power in the manufacture of tarpaulins whereas the appellants, who are claiming benefit of exemption Notification No. 65/87, has not established that the tarpaulins were made without the aid of power. Accordingly Central Excise duty is chargeable on tarpaulins. We also agree with the learned SDR that penalty is imposable on them. However, as the matter has to go back to the jurisdictional Commissioner for examining as to whether the benefit of small scale exemption Notification is available to them and quantum of duty has to be re-determined, we are leaving the question of imposition of penalty to the Adjudicating Authority. The Appellants should submit the proof f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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