2003 (3) TMI 381 - AT - Central Excise

Summary

Issues: Classification of fabrics under Central Excise Tariff Act, 1985.

The judgment by the Appellate Tribunal CEGAT, Mumbai involved a dispute regarding the classification of fabrics under the Central Excise Tariff Act, 1985. The appellants, a manufacturing company, were producing fabrics from Viscose Rayon Yarn and returning them to parties without subjecting them to any process. The initial classification list filed by the appellants was under Heading 5902.30, but the Assistant Collector classified the goods under Heading 5902.30 as Tyre Cord Fabrics of Viscose Rayon, imposing additional duty. The Collector of Central Excise (Appeals) upheld this classification based on the description provided by the appellants themselves. The appeal was filed against this decision.

1. Classification Dispute:
The tribunal analyzed the nature of the fabrics in question, determining that they were not Tyre Cord Fabrics as claimed by the authorities. The appellants argued that the fabrics were closely woven fabrics made from single Rayon filament yarn, different from Tyre Cord Fabrics predominantly made of warp cord. The tribunal noted the distinction between Tyre Cord Fabrics and Chafer Fabrics used in tire manufacturing, emphasizing the need for accurate classification based on industry definitions and characteristics.

2. Classification Description:
The tribunal examined the description provided by the appellants and compared it to industry standards, particularly the Fair Child Dictionary of Textiles. It was observed that the goods were more aligned with Chafer Fabrics rather than Tyre Cord Fabrics. The importance of accurate declaration and classification based on the actual nature of the fabrics was emphasized to avoid misclassification.

3. HSN Notes and Tenacity Test:
The tribunal delved into the HSN notes under Heading 5902 for Tyre Cord Fabrics, highlighting the specifications required for classification. The tenacity strength of the yarn used in the fabrics was a crucial factor in determining the correct classification. The appellants provided a certificate showing a tenacity of 23.15, below the specified threshold of 27 cN/tex. The tribunal stressed the necessity of confirming these specifications through testing before approving the classification.

4. Remittance for Further Examination:
Considering the discrepancies in classification and the lack of conclusive evidence regarding the nature of the fabrics, the tribunal decided to remit the matter back to the Original Authority for further examination. The appellants were instructed to provide additional evidence, including the results of the test on the yarn used in Chafer Fabrics, to determine the accurate classification and duty implications.

In conclusion, the tribunal disposed of the appeal by outlining the need for a thorough examination of the fabrics' characteristics and tenacity strength to ensure accurate classification under the Central Excise Tariff Act, 1985. The decision highlighted the importance of industry definitions and proper declaration for correct classification of goods.