2001 (2) TMI 201 - AT - Central Excise

Summary

Issues:
Classification of "Rain Coats and Rain Suits" under Central Excise Tariff Act, 1985.

Analysis:
The dispute in this case revolves around the classification of "Rain Coats and Rain Suits" under the Central Excise Tariff Act, 1985. The appellants, M/s. Trimurti Industries Ltd., sought classification under Sub-heading 6201.00, claiming a "nil" rate of duty, while the Revenue classified the goods under Sub-heading 4015.00. The appellants contended that the goods were clothing accessories of textile material combined with rubber, excluded from Sub-heading 4015.00 but should be included in Sub-heading 6201.00. The adjudicating authority initially upheld the Revenue's classification, but this decision was set aside by the Commissioner (Appeals), leading to the Revenue's appeal.

The appeal raised two primary grounds challenging the Commissioner's decision. The Revenue argued that the goods should be classified under Chapter 40, specifically Sub-heading 4015.00, as they were made of rubberized fabrics predominated by rubber in terms of weight. They relied on Note 1(e) of Section XI, which excludes fabrics impregnated with rubber from Section XI, supporting their classification under Chapter 40.

The Respondent, in their Memorandum of Cross-Objection, disputed the Revenue's arguments, emphasizing that the goods were not expressly excluded from Section XI and should be classified under Sub-heading 6201.00. They also referenced a decision involving Bengal Waterproof Ltd. to support their position.

During the proceedings, both sides reiterated their arguments. The Revenue maintained that the goods fell under Sub-heading 4015.00 based on the exclusion in Note 1(e) of Section XI, while the Respondent contested this classification, citing Chapter Notes to support their stance.

In delivering the judgment, the Tribunal carefully analyzed the Section Notes and Chapter Notes relevant to the classification issue. They emphasized that the goods, being worn articles, were automatically excluded from Chapter 62. The Tribunal disagreed with the Commissioner (Appeals) interpretation of the term "worn" and concluded that the goods, being made of rubberized fabrics and meant for wearing, should be classified under Sub-heading 4015.00 as articles of apparel. Consequently, the impugned order was set aside, and the appeal filed by the Revenue was allowed, disposing of the Respondent's Cross-Objection as well.