1981 (1) TMI 76 - CGOVT - Central Excise

Issues:
1. Classification of fabrics as Denim under Central Excises and Salt Act, 1944.
2. Appeal against the order of the Asstt. Collector by the assessee.
3. Interpretation of the term 'Denim' by the Government of India.
4. Show cause notice issued by the Government of India to set aside the order-in-appeal.
5. Contention of the assessee regarding the classification of goods as Denim.
6. Lack of evidence provided by the assessee regarding the classification of goods.
7. Comparison of present and previous classifications of goods by the assessee.
8. Submission of affidavits by the petitioners to support their contentions.
9. Government's observation on the petitioners' contentions and affidavits.
10. Decision of the Government to set aside the order-in-appeal and restore the order-in-original.

Analysis:
1. The case involved the classification of fabrics manufactured by the assessee under the Central Excises and Salt Act, 1944, specifically whether the fabrics could be classified as Denim under Item 19 of the First Schedule of the Act. The Supdt. of Central Excise issued show cause notices regarding the classification, leading to a demand for short-levy on the goods cleared by the assessee under a different category.

2. The assessee appealed against the order of the Asstt. Collector, Central Excise, Division I, Ahmedabad, contending that the goods were not Denim but dress material under a different item of the schedule. The Appellate Collector of Central Excise, Bombay, set aside the original order, disagreeing with the classification of the goods as Denim.

3. The Government of India reviewed the case and interpreted the term 'Denim' based on various definitions from textile dictionaries and books. They issued a show cause notice to the assessee, challenging the order-in-appeal and providing reasons based on industry standards and definitions of Denim.

4. The assessee responded to the show cause notice, presenting arguments based on the weight and construction of the fabrics in question, asserting that they did not meet the standard Denim specifications as per industry references. However, the assessee failed to provide evidence of their initial classification or comparative evidence from other mills.

5. The assessee mentioned a revision in the classification of the goods from Denim to dress material due to non-acceptance by dealers, but could not produce documentation to support their claim. They also referenced acceptance of similar goods by other mills as dress material instead of Denim.

6. The Government noted the lack of clarity from the assessee regarding the differences between the present and previous classifications of goods, especially in relation to fabrics declared and sold as Denim by the assessee in the past.

7. The petitioners submitted affidavits to support their contentions, emphasizing the marketability of the goods as dress material due to weave type and weight considerations. However, the Government found these submissions insufficient to justify the reclassification of the goods.

8. The Government observed that the contentions and affidavits provided by the petitioners did not alter the classification of the goods as Denim, as they met the specifications associated with Denim cloth, including variations in weight and weave type.

9. Based on the above analysis, the Government concluded that the order-in-appeal was not proper and legal, setting it aside and reinstating the original order that classified the goods as Denim under the Central Excises and Salt Act, 1944.

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