1985 (9) TMI 342 - AT - Central Excise

Summary

Issues:
Classification of Varnished Fibre Glass Cloth and Varnished Sleevings under Central Excise Tariff.

Analysis:
1. The case involved a dispute over the classification of Varnished Fibre Glass Cloth and Varnished Sleevings under the Central Excise Tariff. The Assistant Collector initially classified the products under Tariff Item 22B and Tariff Item 68, respectively. The Appellate Collector later classified both products under Tariff Item 68. The Central Government proposed to revise the classification back to Tariff Item 22B, leading to a Show Cause Notice to the respondents.

2. The respondents argued that the Show Cause Notice was time-barred, as it was issued after six months from the date of the order-in-appeal. However, the Tribunal held that the one-year limitation period applied for review notices related to classification disputes, not the six-month period for demands for payment of duty.

3. The Central Government, in the Show Cause Notice, referenced additional test reports conducted after the Appellate Collector's order. The Tribunal ruled that for initiating review proceedings, the government should consider only the records available at the time of the original order, not new materials. The absence of disclosure of the subsequent report to the respondents rendered the notice invalid.

4. The Tribunal examined the classification criteria for Varnished Sleevings and Varnished Fibre Glass Cloth. Varnished Sleevings, being tubular and not traditional fabrics, did not fall under Tariff Item 22B. The respondents argued for classification under Tariff Item 22F for Varnished Fibre Glass Cloth, emphasizing the predominance of mineral fibres. However, the government contended that the fibre content was less than 50%, not meeting the requirements of Tariff Item 22F(4).

5. The Tribunal referenced a Gujarat High Court decision emphasizing that once mineral fibres predominate, Tariff Item 22F should apply over other textile fabric entries. Following this precedent, the Tribunal concluded that the Varnished Textile Fabrics did not qualify under Tariff Item 22F and should be classified under Tariff Item 68.

6. Ultimately, the Tribunal upheld the Appellate Collector's classification decision, rejecting the Review Show Cause Notice. The Varnished Fibre Glass Cloth and Varnished Sleevings were deemed to fall under Tariff Item 68 of the Central Excise Tariff.