2004 (10) TMI 418 - AT - Central Excise

Summary

Issues Involved:
Interpretation of Notification No. 6/2000-C.E. and Notification No. 3/2001-C.E. regarding duty exemption for vertical blinds made from handloom fabrics.

Analysis:
The appeal before the Appellate Tribunal CESTAT, NEW DELHI involved the question of whether the benefit of Notification No. 6/2000-C.E. and Notification No. 3/2001-C.E. was applicable to vertical blinds manufactured by a company. The issue centered around whether the vertical blinds, falling under Heading No. 63.03 of the Central Excise Tariff, were made from handloom fabrics as required by the notifications. The Revenue argued that the blinds were made from processed fabrics, not handloom fabrics, based on the manufacturing process involving treatment with vinyl acetate solution and drying before being slit into strips.

Upon examination, the Tribunal found no merit in the Revenue's contentions. The Notifications did not specify that the handloom fabrics had to be unprocessed to qualify for the duty exemption. The Tribunal emphasized that the Notifications provided for a nil rate of duty for made-up textile articles from handloom fabrics under Chapter 63, without distinguishing between processed or unprocessed fabrics. Additionally, the Tribunal noted that the Revenue did not assert that the processed handloom fabrics lost their essential characteristics as handloom fabrics after treatment. Consequently, the Tribunal rejected the appeal by the Revenue and disposed of the cross-objection filed by the Respondent in favor of granting the benefit of the duty exemption to the vertical blinds made from processed handloom fabrics.

In conclusion, the Tribunal's decision clarified that the duty exemption under the Notifications applied to made-up textile articles from handloom fabrics under Chapter 63, regardless of whether the fabrics were processed or unprocessed, as long as the essential characteristics of handloom fabrics were retained after processing.