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Issues: Classification of waterproof fabric under Heading 52.07 or 59.06
In this judgment by the Appellate Tribunal CEGAT, Mumbai, the main issue was the classification of waterproof fabric manufactured by the appellant. The appellant argued that the fabric should be classified under Heading 52.07 of the tariff, which exempts fabrics made without the aid of power from duty. However, the department proposed to classify the fabric under Heading 5906.90 as an impregnated, coated, or covered fabric. The Collector initially dropped the proceedings, but the Tribunal remanded the matter, leading to a final decision on the classification issue. The relevant Harmonized System of Nomenclature headings were discussed, particularly Heading 59.07, which covers textile fabrics impregnated, coated, or covered. Note 5 to Chapter 59 specifies that this heading does not apply if the impregnation, coating, or covering is not visible to the naked eye. The Tribunal analyzed the Explanatory Notes to Heading 59.06, emphasizing that visibility of impregnation or coating is crucial for classification under this heading. Fabrics coated only for specific purposes like waterproofing fall under different headings, such as 52.06 or 52.07, rather than 59.06. The Tribunal also considered the process undertaken by the appellant, noting that the impregnation of fabrics was primarily for waterproofing. It was highlighted that the presence of a visible layer or impregnation is essential for classification under Heading 59.06. The report by the Deputy Chief Chemist did not confirm the visibility of impregnation, while a certificate submitted by the appellant's expert indicated the absence of visible impregnation. The argument based on the weight of impregnation material was dismissed, emphasizing the importance of visibility for classification. Furthermore, the Tribunal referred to a previous decision and aligned its ruling with the principles established in that case. Ultimately, the appeal was allowed, and the order classifying the fabric under Heading 59.06 was set aside, favoring the appellant's classification under Heading 52.07.
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