2007 (6) TMI 20 - AT - Central Excise

Classification Revenue contended that appellant manufactured Rainwear (apparel and clothing) is classified under Heading 40.15 but as per appellant it is fall under Heading 62.01 Held that said article classified under 62.01

Issues Involved:
1. Classification of Rubberised Textile Fabric and Rainwear.
2. Interpretation of Chapter Note 2(a) of Chapter 62.
3. Applicability of previous judgments and principles of sub silentio.

Detailed Analysis:

1. Classification of Rubberised Textile Fabric and Rainwear:
The primary issue was whether the Rubberised textile fabric manufactured by the appellant falls under Chapter 59, Heading No. 59.06, and whether the rainwear made from this material should be classified under Chapter 62, Heading No. 62.01, as opposed to the Revenue's claim that it should be classified under Chapter Heading 4015.00. The authorities below had relied on Chapter Note 2(a) of Chapter 62 to classify rainwear under Heading No. 4015.00, considering it as worn apparel.

2. Interpretation of Chapter Note 2(a) of Chapter 62:
The appellant argued that the rubberised textile fabric used in making rainwear is an excisable good classified under Heading No. 59.06, which was undisputed by the Revenue. The appellant contended that rainwear made from such fabric should fall under Chapter 62, Heading No. 62.01. The appellant further argued that Chapter Note 2(a) of Chapter 62, which excludes "worn clothing or other worn articles," refers to old and used clothing, not newly manufactured apparel. Therefore, the rainwear should not be classified under Chapter Heading 4015.00.

3. Applicability of Previous Judgments and Principles of Sub Silentio:
The appellant relied on previous judgments, such as Bengal Waterproof Works Ltd. v. CCE, Calcutta-II (2002), CCE v. MRF Limited (1998), and India Waterproofing & Dyeing Works (1996), to support their classification under Heading No. 62.01. The appellant argued that these judgments established that articles made from rubberised textile fabrics should not be classified under Chapter 40, which deals with vulcanised rubber articles. The appellant also cited the principle of sub silentio, arguing that any decision made without considering all relevant aspects should not be binding.

Tribunal's Findings:
1. Classification of Rubberised Textile Fabric and Rainwear:
The Tribunal found that the raw material used for rainwear, i.e., rubberised textile fabric, was undisputedly classified under Heading No. 59.06. There was no evidence to suggest that the rainwear was made from vulcanised rubber. Therefore, the classification under Heading No. 4015.00 was deemed inappropriate.

2. Interpretation of Chapter Note 2(a) of Chapter 62:
The Tribunal agreed with the appellant's interpretation that Chapter Note 2(a) of Chapter 62 refers to old and used clothing. The rainwear manufactured from rubberised textile fabric, being new and not worn, should be classified under Heading No. 62.01. The Tribunal also noted that Notification No. 6/2002-C.E., dated 1-3-2002, which declared raincoats falling under Chapter 62 liable to Nil rate of duty, supported this classification.

3. Applicability of Previous Judgments and Principles of Sub Silentio:
The Tribunal found that the previous judgments cited by the appellant were relevant and applicable. The principle of sub silentio was also considered, and it was noted that the judgment in Trimurti Water Proof Pvt. Ltd. (2001) was not binding as it did not consider all relevant aspects and provisions of the law. The Tribunal thus followed the judgments in Bengal Waterproof Works Ltd. and MRF Ltd., which supported the appellant's classification under Heading No. 62.01.

Conclusion:
The Tribunal concluded that the rainwear manufactured by the appellant should be classified under Heading No. 62.01, not Heading No. 4015.00. The Tribunal emphasized that the classification should be based on the raw material used, which was rubberised textile fabric falling under Heading No. 59.06. Consequently, all benefits of relevant circulars and notifications should be applicable to the appellant's goods. The Tribunal also highlighted the importance of considering all relevant legal provisions and previous judgments to ensure consistent and fair classification.

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