1996 (3) TMI 226 - AT - Central Excise

Summary

Issues:
Interpretation of Notification No. 34/84 as amended by Notification No. 94/84 regarding concessional rate of duty for cotton fabrics containing polyester content exceeding 40% by weight and the exclusion of fabrics containing polyester filament yarn.

Detailed Analysis:

Issue 1: Interpretation of Notification No. 34/84 and its amendment by Notification No. 94/84
The case involved the interpretation of Notification No. 34/84, which prescribed a concessional rate of duty for cotton fabrics containing more than 40% polyester fiber or yarn, subject to certain conditions. The amendment by Notification No. 94/84 extended the coverage to fabrics containing polyester fiber, polyester yarn, or both. The proviso excluded fabrics containing any fiber or yarn other than cotton and polyester. The Tribunal observed that the amendment allowed fabrics with polyester filament yarn if the value did not exceed Rs. 25/- per sq. mt.

Issue 2: Exclusion of fabrics containing polyester filament yarn
The main contention was whether fabrics with polyester filament yarn were eligible for the benefit of the notification. The Collector (Appeals) denied the benefit based on the presence of polyester filament yarn in the fabrics. The argument revolved around distinguishing between polyester yarn and polyester filament yarn. The Tribunal held that the exclusion clause in the proviso did not apply to fabrics made with polyester filament yarn if the value did not exceed Rs. 25/- per sq. mt.

Judgment:
The Tribunal allowed the appeal, noting that the Collector (Appeals) had not considered the proviso to the notification after its amendment by Notification No. 94/84. The Tribunal clarified that the exclusion of fabrics containing polyester filament yarn was subject to the value limit specified in the proviso. Since the value of the fabrics in question did not exceed the limit, the benefit of the notification was applicable. The Tribunal emphasized the importance of interpreting the notification in line with the legislative intent and tariff provisions regarding yarn classification.

In conclusion, the Tribunal's decision clarified the interpretation of the notification and upheld the appellant's claim for the concessional rate of duty on cotton fabrics containing polyester content within the specified limits, including fabrics with polyester filament yarn meeting the value criterion.