2017 (10) TMI 1432 - AT - Central Excise

Concessional rate of duty for goods falling under Chapter 56, made of cotton, not containing any other textile material - benefit of N/N. 29/2004-C.E., dated 9-7-2004 as amended by N/N. 7/2012, dated 17-3-2012 - Department was of the view that the goods manufactured by the appellant contained other textile materials along with cotton and hence, not entitled to take concessional rate of duty under the notification - period of dispute is July, 2008 to June, 2014 - Held that - From the test results, it is found that the appellant has used raw materials in the form of cotton, not only cotton but also other fibres such as wool acrylic, etc. - In the finished goods also, the chemical examiner has recorded presence of acrylic polyester, wool, nylon and viscose mixed in cotton. The notification extends the concessional rate of duty only for goods of Chapter 56 if the goods are made of cotton not containing any other textile material - The test result has clearly shown that the finished goods manufactured by the appellant contain significant amount of fibres other than cotton also. Consequently the benefit of exemption will not be available to the appellant. Appeal dismissed - decided against appellant.

Summary

Issues:
Interpretation of Central Excise notification for concessional rate of duty on goods made of cotton; Claim of benefit by appellant; Chemical test results showing presence of other textile materials; Applicability of case law on classification of goods containing multiple textile materials.

Analysis:
The judgment revolves around the interpretation of a Central Excise notification regarding the concessional rate of duty for goods made of cotton. The appellant, engaged in manufacturing non-woven felt, claimed the benefit of the notification, which prescribed a reduced duty for goods made of cotton without any other textile material. The dispute arose when the department contended that the goods manufactured by the appellant contained other textile materials alongside cotton, rendering them ineligible for the concessional rate of duty. Consequently, duty demands were raised, and a penalty was imposed on the Director.

During the proceedings, the appellant argued that the goods should be considered as primarily made of cotton based on the test result of a sample, where cotton was found to be predominant. The appellant also relied on a previous decision in Uni Products (I) Ltd. v. CCE, New Delhi. However, the department justified its decision based on the chemical test results, which showed the presence of various other fibers such as acrylic, polyester, wool, nylon, and viscose mixed with cotton in the finished goods.

Upon reviewing the evidence and arguments presented, the Tribunal concluded that the finished goods indeed contained a significant amount of fibers other than cotton, as indicated by the chemical test results. As per the Central Excise notification, the concessional rate of duty was applicable only to goods made of cotton without any other textile material. The Tribunal emphasized that the case law cited by the appellant regarding the classification of goods with multiple textile materials was not directly relevant to the issue of exemption under the notification.

Ultimately, the Tribunal found no grounds to overturn the impugned orders and dismissed all the appeals, upholding the department's decision regarding the ineligibility of the appellant for the concessional rate of duty under the notification. The judgment was pronounced on October 6, 2017, by Member (T) V. Padmanabhan.