2005 (9) TMI 342 - AT - Central Excise

Summary

Issues:
Classification of Flock Printed Fabrics under CET sub-heading 5907.12. Applicability of Note 5(c) to Chapter 59 in determining the classification of the fabrics.

Classification of Flock Printed Fabrics (CET sub-heading 5907.12):
The judgment pertains to an application for waiver of pre-deposit of duty and penalty arising from the classification of Flock Printed Fabrics under CET sub-heading 5907.12 by the Commissioner of Central Excise, Mumbai. The applicants argued that their fabrics, containing designs resulting from flocking, should not be classified under Chapter Heading 59.07 but should be considered under Note 5(c) to Chapter 59. They presented samples and explained the process where adhesive paste and flock powder are used to create specific designs on the fabrics. The Tribunal noted that the Commissioner did not properly consider the applicability of Note 5 to Chapter 59, as there is a specific entry under Chapter Heading 59.07 for fabrics covered with textile flocks. The Tribunal found that prima facie the disputed fabrics are covered by Note 5(c) to Chapter 59, indicating that they should not be classified under Heading 59.07. Consequently, the Tribunal waived the pre-deposit of duty and penalty pending the appeal.

Applicability of Note 5(c) to Chapter 59:
The issue of the applicability of Note 5(c) to Chapter 59 in determining the classification of the fabrics was crucial in this judgment. The applicants relied on Note 5(c) to argue that their fabrics, with designs resulting from flocking, should not be classified under Chapter Heading 59.07. They demonstrated the process where adhesive paste and flock powder are used to create specific designs on the fabrics. The Tribunal observed that the Commissioner did not adequately address the applicability of Note 5 to the fabric in question. Given that the applicants prima facie demonstrated that the disputed fabrics are covered by Note 5(c) to Chapter 59, the Tribunal concluded that the goods should not be classified under Heading 59.07. As a result, the Tribunal waived the pre-deposit of duty and penalty pending the appeal, emphasizing the significance of correctly applying Note 5 in determining the classification of the fabrics.

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