2017 (4) TMI 689 - AT - Central Excise

Classification of goods - Laces having plain border on either side which were declared as braided fabrics - classified under chapter heading 58.04 of CETA or under chapter heading 58.08 of CETA - Held that - the assessee has been manufacturing the product by using briading or spindle machine, which are used for manufacturing braid only and when there are clear cut reports of two experts, who visited the factory and seen the manufacturing process and the machine, clearly holding that the assessee is manufacturing braids on their Hacoba Machine there is no scope to differ from the stand of the assessee that the item in question is classifiable under chapter heading 58.08 of First Schedule to the CETA, 1985 - appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of goods under Central Excise Tariff - Lace or braided fabric

Analysis:
The case involved an appeal by M/s Orient Apparels Pvt. Limited (M/s OAPL) against the order-in-appeal sustaining the order-in-original classifying Lace manufactured by the appellant-assessee under chapter heading 58.04 of Central Excise Tariff. The dispute arose as the appellant declared Lace with plain borders on both sides as braided fabrics under chapter sub-heading 58.08 10, attracting a lower duty rate. The department contended that the goods should be classified under chapter heading 58.04. The appellant had been classifying the goods under 58.04 but later revised the classification declaration. The Additional Commissioner confirmed the classification under 58.04, leading to the appeal before the Tribunal.

The appellant argued that the product should be classified under heading 58.08.10 as braid, not under 58.04 as Lace. The appellant presented Explanatory Notes to HSN and expert certificates supporting the classification under 58.08. The department, represented by the AR, supported the lower authorities' findings.

During the hearing, it was noted that the product was made on special braiding machines and used for various purposes like edging apparel and furnishing articles. Expert opinions from Dr. Vijay Kumar Kothari and The Technological Institute of Textile & Sciences supported the appellant's claim that the product was a braid. The department relied on a report by Prof. V. K. Aggarwal, but the report was challenged for not examining the manufacturing process and lack of cross-examination during adjudication.

Considering the manufacturing process, expert opinions, and the use of braiding machines, the Tribunal concluded that the item in question was classifiable under chapter heading 58.08 of the Central Excise Tariff Act, 1985. Therefore, the impugned order was set aside, and the appeal was allowed in favor of the appellant.