2003 (1) TMI 146 - AT - Central Excise

Summary

Issues Involved:
1. Classification of 'Tarpaulin & Tents' under the Central Excise Tariff Act.
2. Applicability of previous judgments and definitions of 'textile'.
3. Specificity of tariff headings and interpretation rules.
4. Imposition of penalty.

Summary:

Issue 1: Classification of 'Tarpaulin & Tents'
The primary issue is whether 'Tarpaulin & Tents' manufactured by M/s. Gujarat Raffia Industries Ltd. should be classified under Heading No. 63.06 or Heading No. 39.26 of the Central Excise Tariff Act. The Commissioner (Appeals) confirmed classification under Heading No. 39.26, while the appellants argued for Heading No. 63.06.

Issue 2: Applicability of Previous Judgments and Definitions of 'Textile'
The appellants cited the Supreme Court's decision in Porritts and Spencer (Asia) Ltd. v. State of Haryana, which defined 'textile' broadly. However, the Tribunal noted that the M.P. High Court in Raj Pack Well Ltd. v. Union of India had already addressed similar issues, classifying HDPE products as plastics. The Tribunal found that the process of manufacturing tarpaulin was similar to that of HDPE sacks, thus making the Raj Pack Well decision applicable.

Issue 3: Specificity of Tariff Headings and Interpretation Rules
The appellants argued that Heading 63.06 is more specific for tarpaulin, as it is explicitly mentioned there. However, the Tribunal referred to the Explanatory Notes of HSN, which indicate that Heading 63.06 covers tarpaulin made of man-made fibre fabric or heavy canvas, not plastic. Therefore, tarpaulin made from HDPE/plastic strips should fall under Heading 39.26, which covers articles of plastics not specified elsewhere.

Issue 4: Imposition of Penalty
The appellants contended that no penalty should be imposed as the classification issue involved a genuine difference of opinion. The Tribunal did not find specific reasons in the impugned order to justify the penalty and thus did not address this issue in detail.

Conclusion:
The Tribunal upheld the classification of 'Tarpaulin & Tents' under Heading 39.26 of the Central Excise Tariff Act, rejecting the appeal. The decision was based on the similarity in the manufacturing process with HDPE sacks and the interpretation of tariff headings according to HSN Explanatory Notes.