1987 (10) TMI 157 - AT - Central Excise

Summary

Issues:
1. Classification of cropping of fabrics under Central Excise Tariff Schedule.
2. Applicability of Notification No. 80/76 and subsequent amendments.
3. Interpretation of the finishing process of cropping in relation to fabric classification.
4. Justification of differential interest under Central Excise Rule 49A.

Analysis:
The judgment by the Appellate Tribunal CEGAT, New Delhi dealt with the classification of cropping of fabrics under the Central Excise Tariff Schedule. The issue at hand was whether cropping of fabrics is ancillary to the manufacture of grey cotton fabrics under specific tariff items. The department contended that cropping classified the fabric under a particular item, while the appellants argued that cropping did not result in a transformation of the fabric. The Collector of Central Excise (Appeals) upheld the department's stance, stating that cropping changed the classification of the fabric. The Tribunal noted that the process of cropping was mentioned in a notification exempting certain fabrics from excise duty, subject to conditions. The tribunal emphasized that the exemption would not apply if unprocessed fabrics were subjected to specified processes within the factory where they were produced, which included cropping. Consequently, the tribunal dismissed the appeals, affirming the justification for demanding differential interest under Central Excise Rule 49A for cleared fabrics after processing.