1986 (10) TMI 162 - AT - Central Excise

Summary

Issues:
Classification of goods under Central Excise Tariff Schedule, eligibility for duty exemption under Notification No. 87/76, interpretation of "fabrics" for exemption, applicability of previous tribunal decisions.

Analysis:
The case involved a dispute arising from an Order-in-Appeal passed by the Appellate Collector of Central Excise in favor of the respondent, M/s. Bharat Shoe Lace Works, Bombay. The Central Government issued a notice challenging the legality of the order, leading to proceedings before the Appellate Tribunal CEGAT, New Delhi under Section 35P of the Central Excises and Salt Act.

The respondent was engaged in the manufacture of Braided Fibre Glass Sleevings classified under item No. 22 F of the Central Excise Tariff Schedule. The department alleged that the goods were cleared without a central excise license and proper procedure, leading to a demand for duty and imposition of a penalty by the Assistant Collector. However, the Appellate Collector accepted the respondent's contention that the goods were exempted from duty under Notification No. 87/76, setting aside the Assistant Collector's order.

The show cause notice challenged the classification of the goods as glass fabrics, contending that only woven material could be considered as fabrics, citing the Supreme Court's decision in M/s. Gujarat Woollen Felt Mills v. U.O.I. The respondent denied the allegations, leading to a hearing before the Tribunal.

During the proceedings, both sides agreed that the goods fell under item No. 22 F of the CET. The Revenue argued that braided fibre glass sleevings did not qualify for duty exemption as glass fabrics, while the respondent argued to the contrary, citing relevant case laws.

The Tribunal considered various Supreme Court decisions, including Delhi Cloth & General Mills Co. Ltd. v. State of Rajasthan, Porrits & Spencer (Asia) Ltd. v. State of Haryana, and Filter Co. v. Commissioner of Sales Tax, Madhya Pradesh, which discussed the broad definition of fabrics to include non-woven materials like felts. The Tribunal also referenced the Madras High Court case involving cotton braided cord, which was considered cotton fabric under the Central Sales Tax Act.

After examining the sample of braided fibre glass sleevings and applying the precedents, the Tribunal concluded that the goods fell within the description of glass fabrics, dismissing the show cause notice and upholding the Appellate Collector's order.

In a separate judgment by another Member, concurrence was expressed with the Vice President's decision, noting the relevance of previous tribunal decisions and upholding the classification of braided fibre glass sleevings as glass fabrics, leading to the dismissal of the appeal and discharge of the review notice.