2015 (2) TMI 468 - AT - Central Excise

Classification of goods - Whether the grey knitted fabric in running length which emerges in the factory of DTEPL and the processed knitted fabric which emerges in the factory of M/s S. Kumars is classifiable as textile made up articles not elsewhere specified under heading 6307.90 of the tariff or whether the same are classifiable as knitted pile fabrics under heading 60.01 - Held that - in the Tribunal in the case of S. Kumars Ltd. Vs CCE Indore vide its judgment reported 2003 (2) TMI 268 - CEGAT, NEW DELHI . after considering the above facts has held that the knitted pile fabrics in running length are classifiable under heading 60.01 and not heading 6307.90, and though the department has filed an appeal to Hon ble Supreme Court against this judgement, the same is still pending. In our view this judgment of the Tribunal is binding on us. As regards the judgements of the Tribunal in the cases of CCE Guntur vs. city tax pvt. Ltd and CCE Madras vs. Binni ltd. (BMC Mills) (2005 (12) TMI 360 - CESTAT, BANGALORE) cited by the Ld. Jt. CDR we find that the dispute in these cases was as to whether the tere-towel cloth in running length with dividing thread was classifiable as textile made up under heading 63.02 in view of note 5(b) of Section XI of the tariff or whether the same was classifiable as terry-towelling similar woven fabrics other than narrow woves fabrics of heading 58.06 under heading 58.02. The issue involved in these cases is totally different and in our view the Tribunal s judgements in these cases are not applicable to the facts of this case, as in this case the dispute is as to whether the grey knitted pile fabrics in running length and processed knitted pile fabrics in running length are classifiable as textile made up or not in view of note 5(f) section XI of the Central Excise tariff, and it is precisely this issue which stands decided in favour of the respondent by the Tribunal s judgement in case of S. Kumars Ltd. Vs. CCE Indore - Decided against Revenue.

Summary

Issues:
Classification of grey knitted pile fabric and processed knitted pile fabric under heading 6307.90 or heading 60.01.

Analysis:
The case involved a dispute regarding the classification of grey knitted pile fabric and processed knitted pile fabric. The Revenue contended that the fabrics should be classified as "other made up textile articles not elsewhere specified" under heading 6307.90, relying on Section note 5(f) of Section XI. The Original Adjudicating Authority agreed with this classification. However, the Commissioner (Appeals) reversed these orders, classifying the goods under heading 60.01 as knitted pile fabric. The Revenue filed appeals against these decisions.

During the proceedings, the Revenue argued that the fabrics should be considered as made-up textile articles under subheading 6307.90 due to the indentations along the length of the fabric, allowing for easy cutting and conversion into towels. They also referenced a previous Tribunal judgment that supported their position. On the other hand, the Respondent's counsel contended that the fabrics should be classified as knitted pile fabric under heading 60.01, emphasizing that the final product, i.e., towels, only emerged after further processing by job workers.

The Tribunal examined the facts and previous judgments, particularly the case of S. Kumars Ltd. Vs. CCE Indore, where it was held that knitted pile fabrics in running length should be classified under heading 60.01, not heading 6307.90. The Tribunal found this judgment binding, despite the department's pending appeal to the Supreme Court. Additionally, the Tribunal distinguished other cases cited by the Revenue, noting that the issues in those cases were different from the current dispute.

Based on the analysis, the Tribunal concluded that the fabrics in question should be classified as knitted pile fabric under heading 60.01, in line with the precedent set by the S. Kumars Ltd. case. As a result, the Revenue's appeals were dismissed for lacking merit.

This detailed analysis highlights the key arguments presented by both parties, the relevant legal provisions, and the Tribunal's reasoning based on precedent and factual considerations.