1997 (5) TMI 192 - AT - Central Excise

Summary

Issues: Classification of processed cotton fabrics under Excise Tariff.

In this judgment by the Appellate Tribunal CEGAT, New Delhi, the issue revolves around the correct classification of processed cotton fabrics under the Excise Tariff. The appellants claimed classification under sub-heading No. 5206.31 of the Excise Tariff and the benefit of Notification No. 142/86-C.E., dated 1-3-1986. The department, however, issued show cause notices demanding duty under a different sub-heading, i.e., 5901.10, contending that the fabrics were classifiable under this heading due to being coated with specific substances. The primary question was whether the product should be classified under 5206.31 or 5901.10 of the Excise Tariff. The dispute arose from the description of the product and its usage, leading to conflicting interpretations of the applicable sub-heading for classification.

The appellants argued that the product was not heavily coated with starch and was predominantly used as side patti for book binding, rather than for outer covers of books. They contended that the fabric was coated with natural starch and fillers on only one side, making it suitable for classification under 5206.31. The Chemical Examiner's report supported this claim by describing the fabric as treated with sizing material containing starch, gummy matter, and inorganic siliceous material. The appellants also highlighted the historical classification of the product under a previous Tariff Item, emphasizing its similarity to the current classification under 5206.

The Collector and the learned authorities rejected the appellants' contentions, relying on the description under Tariff heading 59.01 and the interpretation of coated fabrics used for book binding. They emphasized the presence of specific coatings on the fabric and its usage in book binding, leading to the classification under 5901.10. The Collector referred to industry practices and definitions from Fair Child Dictionary to support the classification of the product as book binding cloth. The authorities concluded that the item fell under 5901.10 based on the coating materials and its application in book binding, disregarding the appellants' arguments and historical classification references.

After hearing both parties and examining the Tariff headings, the Tribunal upheld the lower authorities' classification under 5901.10. They reasoned that the product met the criteria of being coated with specific substances and used for book binding purposes, aligning with the description under Tariff heading 59.01. The Tribunal emphasized that the classification was in harmony with the HSN description and industry practices, rejecting the appellants' claims of classification under 5206.31. The Tribunal found no merit in the appeals and confirmed the lower authorities' decision, thereby resolving the classification dispute in favor of the Revenue department.