1997 (12) TMI 327 - AT - Central Excise

Summary

Issues:
Classification of scoured wool under Tariff Item 68 of the Central Excise Tariff.

Detailed Analysis:
The appeal was filed by the department against the Order-in-Appeal dated 17-12-1990 passed by the Collector (Appeals). The respondent had filed a refund claim contending that scoured wool is essentially wool from which the grease has been removed by washing with hot water, soap, or alkaline solutions. The Assistant Collector rejected the refund claim stating that scoured wool is a new product with different characteristics and uses. The Collector (Appeals) overturned the Assistant Collector's decision, stating that scoured wool is not a new product and that the process of scouring does not amount to manufacturing. The department, unsatisfied with the Collector (Appeals) decision, argued that scoured wool should be classified under Tariff Item 68 as it is distinct from raw wool after the cleaning process.

The main issue to be determined was whether scoured wool should be classified as an excisable commodity under Item 68 of the Central Excise Tariff. The Tribunal referred to a circular from the Central Board of Excise & Customs, which clarified that scoured wool should be considered as raw wool under the tariff classification. The circular explained that scoured wool is essentially wool from which the grease has been removed, making it eligible for the same classification as raw wool. The Tribunal, following the precedent set in a previous case, upheld the contention of the assessee that scoured wool should not be assessed to duty under Item 68. Therefore, the appeal filed by the department was dismissed based on the established classification principles and previous Tribunal decisions.

In conclusion, the judgment clarified the classification of scoured wool under the Central Excise Tariff, emphasizing that scoured wool should be considered as raw wool and not as a separate excisable commodity under Item 68. The decision was based on the interpretation of relevant circulars and previous Tribunal rulings, which established that scoured wool retains the essential characteristics of raw wool after the cleaning process.