2018 (3) TMI 1850 - AT - Central Excise

Benefit of Concessional rate of duty - N/N. 29/2004-Cx - import of 100% cotton woven interlining materials falling under Chapter heading 5903 - Inasmuch as, the fabrics in question were sprayed with polymer based fusible material, the authorities entertained the view that the same are no longer cotton woven textiles - Levy of SAD - HELD THAT - The Textiles Committee in their report had clearly stated that warp and weft of the fabric is 100% cotton. Coating the same with polymer based fusible material would not convert the character of the fabric inasmuch as, the said material is a mere coating and is not part of the fabric in question by way of any other textile materials. The exclusion from the benefit of notification would apply only if the fabrics in question are not made of cotton or are made of any other textile materials. Levy of SAD - HELD THAT - The Revenue s grievance that the goods in question were taken out of the Schedule of Additional Duties of Excise (Goods of Special Importance) Act, 1957 with effect from 8-4-2011 and as such, the reasoning of the appellate authority that the goods would be exempt from SAD as they were exempt from SIA, is not proper - Learned Advocate appearing for the appellant agrees with the contention of the Revenue and is not contesting the same. In that view of the matter, we hold in favour of the Revenue and set aside the said part of the Commissioner (Appeals) order vide which, he has held that SAD is not applicable. Appeal disposed off.

Summary

Issues:
- Classification of imported fabric as 100% cotton woven interlining materials
- Benefit of Central Excise Notification No. 29/2004-Cx.
- Imposition of Special Additional Duty (SAD)

Classification of Imported Fabric:
The respondent imported fabric declared as 100% cotton woven interlining materials under Chapter heading 5903, seeking the benefit of Central Excise Notification No. 29/2004-Cx. The fabric was sprayed with polymer-based fusible material, leading authorities to question its classification. The Textiles Committee confirmed the warp and weft as 100% cotton woven fusible interlining material. The Commissioner (Appeals) relied on this report, concluding that the goods qualified as 100% cotton textiles, making the importer eligible for the benefit. The Tribunal upheld this decision, emphasizing that the polymer coating did not alter the fabric's cotton composition, thus maintaining the benefit's applicability.

Benefit of Central Excise Notification:
The Commissioner (Appeals) determined that the goods were indeed 100% cotton textiles, allowing the importer to benefit from Central Excise Notification No. 29/2004-Cx. The Tribunal concurred with this assessment, emphasizing that the Textiles Committee's report supported the fabric's classification as 100% cotton. The Tribunal highlighted that the coating of polymer-based fusible material did not change the fabric's essential composition, enabling the importer to claim the concessional rate of duty under the notification.

Imposition of Special Additional Duty (SAD):
Regarding the imposition of Special Additional Duty (SAD), the appellate authority initially exempted the goods from SAD based on the exemption under Notification No. 20/2006. However, the Revenue contended that the goods were removed from the Schedule of Additional Duties of Excise with effect from a specific date. The Tribunal agreed with the Revenue's argument, setting aside the exemption from SAD granted by the Commissioner (Appeals). Consequently, the original adjudicating authority's decision upholding the leviability of SAD was reinstated, and the Revenue's appeals were disposed of in favor of imposing SAD on the imported goods.