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2016 (1) TMI 919 - AT - Central ExciseClassification - DHPE warp knitted fabrics, HDPE ropes, strips, rachal knitted fabrics for agro products and wastes made out of plastic strip less than 5 mm in width - Held that - Chapter Note 1A to Chapter 54 was inserted with effect from 29.06.2010 with retrospective effect. The products under question in the present appeals are not plastic woven bags. These are knitted fabrics used as agro net. Hence distinct from the plastic bags considered in the earlier cases. By taking into account the changes in the scope of the tariff heading and the item under consideration recently the Ahmedabad Bench of the Hon ble Tribunal in the case of Flora Agrotech Vs. CCE Vapi (2014 (11) TMI 114 - CESTAT AHMEDABAD ) has held that such knitted fabrics are classifiable under 60059000. The fabrics manufactured by the appellants are warp knitted fabrics made out of synthetic yarn of width less than 5mm be classified under 6005. Further, the ISI standard notified by Bureau of Indian Standards for agro textiles shade nets for agriculture and horticulture and as per this standard the above textile fabrics are made from tapes of 1.7 mm width. And in the present case the width of the tape is of 1.5 mm and the goods manufactured by the appellants are classifiable as textile fabrics and articles of fabrics rightly classifiable under chapter heading 60059000 and the strips (HDPE) not exceeding 5mm is classifiable under 54049020 - Decided in favour of assessee.
Issues:
Classification of HDPE Knitted fabrics under Chapter 3926 for SSI exemption, classification of HDPE Rachal Knitted Fabrics, HDPE rope, HDPE Strips, and waste under different chapters, interpretation of Section Note 1(g) of Section XI of CETA 1985, applicability of HSN Explanatory note under Chapter 54, relevance of Board's Circular dated 24.09.92, reliance on Textile Committee Report, SASMIRA report, and CIPET test report for classification, comparison with previous tribunal decisions, consideration of ISI standard for Agro textiles, dispute over exemption notification No. 08/2003 dated 01.03.2003. Analysis: The judgment by the Appellate Tribunal CESTAT Chennai involved appeals regarding the classification of HDPE products for duty purposes and exemption eligibility under Notification No. 08/2003. The issues revolved around the classification of HDPE Knitted fabrics under Chapter 3926 for SSI exemption and the classification of HDPE Rachal Knitted Fabrics, HDPE rope, HDPE Strips, and waste under different chapters. The Ld. Advocate for the assessees argued for the classification of HDPE warp Knitted fabrics under 59039090, HDPE Rope under 56079010, HDPE Strips under 54049020, and Waste under 55051090, emphasizing the exclusion of textile materials under Section Note 1(g) of Section XI of CETA 1985. The advocate relied on various reports and tribunal decisions to support the classification under textile fabrics chapters. The Ld. AR, on the other hand, supported the classification under Chapter 39 as articles of plastics, citing Board's order and a High Court decision. The arguments centered around the predominance of plastic material and exclusion of textile articles under Section Note 2A of Section 11. The Ld. Advocate countered these arguments by highlighting the classification rules and committee reports confirming the width of the products, asserting the classification under textile fabrics chapters. The Tribunal considered the historical practices, legal notes, and interpretative rules to determine the proper classification of the products in question. After hearing both sides and reviewing the evidence, the Tribunal concluded that the HDPE products should be classified as textile fabrics and articles of fabrics under specific chapters, based on the certificates obtained by the appellants and the ISI standard for Agro textiles. The judgment set aside the impugned order, allowing the assessees' appeals with consequential benefits and rejecting the revenue appeal. The decision provided a detailed analysis of the classification issues and relied on legal provisions, reports, and standards to reach a conclusive determination in favor of the assessees.
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