2016 (9) TMI 683 - AT - Central Excise

Classification - woven goods - It was contended that, all these goods are actually labels/labels tapes bearing lace like ornamental designs/images and were manufactured by the similar process of weaving along with other labels of various designs falling under CETH No. 58.07 attracting nil rate of duty. - goods falling under Chapter Heading 58.04 or CETH No. 58.07 - Held that - Considering the Explanatory Notes of Chapter Heading 5804, when the subject goods cannot be classified as lace under this Chapter, other classification in alternative in the present proceedings is Chapter Heading 5807. Therefore, only choice for the classification now in the present proceedings is Chapter Heading 5807 as the Revenue has not pleaded any other classification i.e. in lieu of Chapter Heading 5804 other than 5807. We accordingly hold that the goods presently deserve classification under Chapter Heading 5807 of Central Excise Tariff. - Matter remanded back for quantification of duty, if any. - Decided partly in favor of assessee.

Summary

Issues:
Classification of goods labeled as lace, tape, bale, than, etc. under Central Excise Tariff Heading 5804 and eligibility for exemption under Notification No. 8/2003-CE dated 1.3.2003.

Analysis:
The appellant contended that the goods in question, described as labels, label tapes, lace, bales, and thans, are actually labels/label tapes bearing lace-like ornamental designs/images and should be classified under Chapter Heading 5807 with a nil rate of duty. They argued that the goods do not fall under Chapter Heading 5804 and provided samples to support their claim. The Commissioner (Appeals) classified some goods as labels under Chapter Heading 5807 and some as lace under Chapter Heading 5804, directing the deduction of trading sale value from lace clearances for duty calculation. The Tribunal noted the goods were running length items described differently by the appellant, distinguishing labels from lace based on their purpose and design elements.

The Tribunal examined Chapter Headings 5804 and 5807 to determine the correct classification. Lace, as per Explanatory Notes, is ornamental openwork fabric without distinct warp and weft, unlike the subject goods produced by the appellant using warp and weft threads. Thus, the technical classification as lace under Chapter Heading 5804 was deemed incorrect. Since the goods did not qualify as lace, the only alternative classification was under Chapter Heading 5807. Consequently, the Tribunal set aside the previous order and remanded the matter for fresh adjudication under Chapter Heading 5807, directing the original authority to determine any duty liability within four months while granting the appellant an opportunity for a hearing and evidence submission.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing the technical distinctions between lace and the goods in question, leading to the reclassification under Chapter Heading 5807. The decision highlighted the importance of accurate classification based on specific criteria outlined in the Central Excise Tariff, ensuring appropriate duty assessment and compliance with relevant notifications.