1997 (12) TMI 352 - AT - Central Excise

Summary

Issues:
Classification of cotton fabrics under Central Excise Tariff Act based on fiber composition and test results; Application of test results from one lot to fabrics covered by a classification list containing multiple lot numbers.

Analysis:

Issue 1: Classification of Cotton Fabrics
The appeal was filed against the classification of Dyed Cotton and Polyester fabrics under Heading 52.09 by the Asstt. Commissioner, which was later revised to Heading 52.06 by the Asstt. Collector. The Respondents challenged this classification, leading to the present appeal before the Tribunal. The Commissioner (Appeals) relied on a previous Tribunal decision and held that the test results from one lot (lot No. 32) should only apply to fabrics from that specific lot. The Respondents' classification list contained multiple lot numbers, but samples were only drawn from one lot for testing. The Tribunal noted that the Respondents did not declare other lot numbers in their classification list, and hence, the Department's application of test results from one lot to all fabrics covered by the classification list was justified.

Issue 2: Application of Test Results to Multiple Lots
The Department argued that since the fabrics under different lot numbers were received from the same customer and no separate classification lists were filed for each lot, it was reasonable to apply the test results of one lot to all fabrics covered by the classification list. The Respondents' consultant supported the Commissioner (Appeals)' decision based on the Tribunal precedent. The Tribunal examined the classification list and found no indication of separate lot numbers. It was observed that the Respondents had the opportunity to file separate classification lists for different lots if the fabric compositions varied, but they chose to submit only one list. Additionally, the fact that the Respondents requested a re-test without mentioning other lots indicated their awareness of the situation. The Tribunal distinguished this case from the precedent cited by the Commissioner (Appeals) concerning yarn blending, as the circumstances were different here with fabrics received from the same customer without separate declarations for each lot. Consequently, the Tribunal set aside the impugned order and allowed the Department's appeal.

In conclusion, the Tribunal upheld the Department's decision to apply the test results from one lot to all fabrics covered by the classification list due to the lack of separate declarations for multiple lot numbers. The Respondents' failure to provide distinct classification lists for different lots and their actions during the re-test process supported the Department's stance, leading to the allowance of the Department's appeal.