2018 (2) TMI 1606 - AT - Central Excise

Benefit of N/N. 30/2004-CE dated 09.07.2004 - Canvass and Tarpaulin - Revenue is of the view that these are the parts and accessories of motor vehicle and appropriately classifiable under heading 8708 which does not have exemption under N/N. 30/2004-CE - Held that - identical issue came up before this Tribunal in the case of J.S. Fabrics v. Commissioner of Central Excise, Kanpur 2014 (12) TMI 232 - CESTAT NEW DELHI , wherein the Tribunal has held that The canvas Tarpaulins, in question, are specially shaped for different model of lorries and though the Department s contention is that the same are not flat, no evidence in this regard has been produced. In our view, therefore, these Tarpaulin would be correctly classifiable under heading 6306 and not as parts or accessories of motor vehicles under heading 8708. The appellant are entitled for exemption under N/N. 30/2004-CE - appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of goods under Central Excise Tariff Act - Applicability of Notification No.30/2004-CE.

Analysis:
The appellant was manufacturing and clearing Canvass and Tarpaulin classified under subheading 6307 of the Central Excise Tariff Act, availing exemption under Notification No.30/2004-CE. The Revenue contended that these goods were parts and accessories of motor vehicles, classifiable under heading 8708 without exemption. Proceedings were initiated against the appellant resulting in a demand for duty, interest, and penalty under heading 8708. The Tribunal referred to a similar case where it was held that canvas canopies designed for lorries, tool bags, and web equipment made of textile material fall under heading 6306/6307 and are fully exempt under Notification No.30/2004-CE. The Tribunal reasoned that the canvas canopies, made from canvas tarpaulin, are cut into special shapes for covering goods loaded into open lorries and are correctly classifiable under heading 6306, not as parts or accessories of motor vehicles under heading 8708.

The Tribunal relied on the HSN explanatory notes to ascertain the classification, stating that tarpaulins are used to protect goods against bad weather and are generally made of coated or uncoated man-made fiber fabrics. The canvas tarpaulins in question, specially shaped for different lorry models, were deemed appropriately classifiable under heading 6306. The Tribunal emphasized that when a heading in the Central Excise Tariff is patterned on HSN, the HSN explanatory note holds persuasive value in determining the scope of the corresponding heading in the Excise Tariff. Therefore, the canvas canopies designed for lorries were held eligible for exemption under Notification No.30/2004-CE.

In conclusion, the Tribunal upheld that the goods in question were rightly classified under heading 6306 of the Central Excise Tariff Act, entitling the appellant to exemption under Notification No.30/2004-CE. Consequently, no duty was deemed payable by the appellant, leading to the setting aside of the impugned order and allowing the appeal with any consequential relief.