1988 (8) TMI 203 - AT - Central Excise

Summary

Issues:
Classification of empire cloth under Tariff Heading 59.06.90 or as Insulators under heading 8546.00.

Detailed Analysis:
The appeal was filed by the Collector of Central Excise, Hyderabad against the order of the Collector Central Excise (Appeals), Madras regarding the classification of empire cloth. The main issue was whether the cloth should be assessed under Tariff Heading 59.06.90 or as Insulators under heading 8546.00.

The Assistant Collector initially ruled that the goods were assessable under heading 5906.90, considering the chapter notes and the nature of the fabric. However, he did not provide any findings regarding the assessment under Tariff Heading 8546.00.

The Collector (Appeals) examined the issue and concluded that the empire cloth should be classified under Tariff Heading 8546 as an insulator, not under 5906.90, as it was specifically used for insulation purposes and did not function as a regular fabric.

The Appellant Collector argued that heading 5906.90, covering impregnated fabrics, was more specific and appropriate for assessment, while Tariff Heading 8546 was only for insulators with distinct shapes and sizes.

The department's representative contended that the Central Excise Tariff, based on International Harmonised Coding, supported the classification under heading 5906.90 for industrial fabrics, while insulators under heading 8546 required specific shapes for ready use.

The respondents' representative argued against the reliance on the Harmonised Coding System, citing the self-contained nature of the Central Excise Tariff with its own interpretative rules. They emphasized that the goods in question were not predominantly fabric and should be classified as insulators.

The Tribunal analyzed the relevant tariff headings and chapter notes, concluding that the empire cloth fell under Chapter Heading 5906 as impregnated fabrics, not under Chapter 85 for electrical insulators. The judgment emphasized that the goods met the description of impregnated fabrics and did not qualify as ready-to-use electrical insulators.

A separate judgment by another Member of the Tribunal disagreed with the majority's decision, arguing that the empire cloth should be classified under Heading 8546 as insulators based on the essential character acquired through impregnation, despite lacking specific shapes initially.

Ultimately, the majority decision allowed the appeal, classifying the empire cloth under Tariff Heading 5906.90 as impregnated fabrics rather than as insulators under Heading 8546.00.