2001 (2) TMI 217 - AT - Central Excise

Summary

Issues:
1. Classification of polyester tapes (zipper tapes) as parts of slide fasteners or as Narrow Woven Fabrics under the Central Excise Tariff Act, 1985.
2. Valuation of the impugned product and availability of Modvat credit in case the product is held to be dutiable.

Analysis:

Issue 1: Classification of Polyester Tapes
The appeal revolves around the classification of polyester tapes manufactured by Zip Industries. The main contention is whether these tapes should be classified as parts of slide fasteners under Heading 96.07, as claimed by the appellant, or as Narrow Woven Fabrics under sub-heading 5806.20 of the Central Excise Tariff Act, 1985, as decided by the Commissioner of Central Excise. The appellant argues that the product does not have selvedges on both edges, a requirement for narrow woven fabrics under Note 6 of Chapter 58 of CETA. They rely on previous Tribunal decisions and the HSN explanatory notes to support their classification under Heading 96.07. On the other hand, the Revenue argues that the product is most akin to narrow woven fabrics and should be classified under Heading 58.06. The Tribunal, after considering both sides, holds that the product is classifiable under Heading 96.07, as it is used for making slide fasteners and falls under the category of parts of slide fasteners.

Issue 2: Valuation and Modvat Credit
Regarding the valuation of the impugned product and the availability of Modvat credit if the product is held to be dutiable, the Tribunal finds it unnecessary to pass any order on the valuation aspect. Since the Tariff rate was nil during the relevant period, the Tribunal does not delve into the valuation dispute. Additionally, as the product is classified under Heading 96.07 with a nil rate of duty during the disputed period, the Tribunal does not find it necessary to remand the matter to the Commissioner. Consequently, the impugned order is set aside, and the appeal is allowed with consequential relief, if any.

In conclusion, the Tribunal rules in favor of Zip Industries, classifying the polyester tapes as parts of slide fasteners under Heading 96.07 and addressing the valuation and Modvat credit issues in light of the nil duty rate during the disputed period.