2017 (4) TMI 1164 - AT - Central Excise

Classification of goods - HDPE strips, HDPE knitted fabrics, HDPE knitted bags - whether classification of products namely HDPE strips, HDPE knitted fabrics, HDPE knitted bags are classifiable under sub-heading No.392010.92, 392690.90, 392329.90 of CETA, 1975 or under sub-heading No.540490.20, 540720.90, 630533.00 of CETA, 1985? - The main contention of Ld. A.R for Revenue is that the products are not manmade fibre but are strips and so amendment brought forth vide Note 1A in Chapter 54 is not applicable - Held that - A specific entry in the CETA, 1985 has to be the proper classification than a general entry in Chapter 39 of the CETA, 1985, as per the Rules of interpretation to the CETA, 1985 - The Synthetic & Art Silk Mills Research Association (SASMIRA), Mumbai SASMIRA is linked to the Ministry of Textiles, Govt. of India, SASMIRA and after giving the definitions of Synthetic Textiles, warp knitted fabric etc., opined in their letter, dated 18-4-2012 & 15-3-2013 that the product manufactured by the appellant is Warp Knitted Fabrics Technical Textile made up of man-made synthetic yarn of width less than 5 mm - reliance placed in the case of CCE, Tirunelvi Versus M/s. Sunpak And Vice-Versa 2016 (1) TMI 919 - CESTAT CHENNAI , where it was held that 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. Appeal allowed - demand withheld - decided in favor of assessee.

Summary

Issues involved: Classification of products - HDPE strips, HDPE knitted fabrics, HDPE knitted bags under sub-heading No.392010.92, 392690.90, 392329.90 of CETA'1975 or under sub-heading No.540490.20, 540720.90, 630533.00 of CETA'1985.

Analysis:

1. The appellants manufactured various products under specific subheadings of CETA'1985 and paid excise duty at 16% ad valorem. However, a reclassification was done in April 2006 under Chapter 54 and 63, leading to a demand raised by the department under Chapter 39. The original authority and Commissioner (Appeals) confirmed the duty under Chapter 39. The main issue was the classification of HDPE products under different subheadings.

2. The appellant's counsel cited precedents like Flora Agrotech Vs CCE Vapi and CCE Tirunelveli Vs Sunpak to support the classification under Chapter 54. The Revenue argued that the products were not man-made fibers but strips, hence not covered under the amendment in Chapter 54. The Tribunal examined Chapter Heading 5404 and noted that the heading includes strips not less than 5 mm, supporting the appellant's argument based on case law.

3. The Tribunal analyzed Chapter Note 1A of Chapter 54, emphasizing that man-made fibers from plastic waste are classified as textile materials. The Technical Textile unit registration and certificates obtained by the appellants confirmed the classification under Chapter 54. The Tribunal also considered the Board's circular and previous judgments to support the classification of the products as knitted fabrics under 6005 90 00.

4. Relying on the judgments mentioned and the certificates obtained by the appellants, the Tribunal concluded that the demand of duty under Chapter 39 was unsustainable. The impugned order was set aside, and the appeal was allowed with consequential relief as per law. The decision was pronounced in open court, providing relief to the appellants based on the classification under Chapter 54.

This detailed analysis of the judgment showcases the legal intricacies involved in determining the correct classification of products under specific subheadings of the Central Excise Tariff Act, 1985.