1998 (3) TMI 323 - AT - Central Excise

Summary

Issues: Classification of laminated fabrics based on man-made knitted fabrics under Central Excise Tariff.

Classification of Fabrics:
The case involved a challenge to the classification of laminated fabrics with a base of man-made knitted fabrics under the Central Excise Tariff. The Collector, Central Excise (Appeals), Chandigarh had classified the fabrics under sub-heading No. 5903.29, while the appellants argued for classification under sub-heading No. 5903.99 of the Tariff.

Merits of Classification:
The Tribunal examined the construction of the fabrics and relevant Tariff entries. It was established that the base fabrics were man-made knitted fabrics, falling under Heading No. 59.03 of the Tariff. This heading included textile fabrics impregnated, coated, covered, or laminated with plastics. Sub-headings differentiated based on the base fabrics, with sub-heading 5903.29 specifically covering fabrics with a base of man-made textile materials.

Interpretation of Tariff Entries:
The appellants contended that man-made knitted fabric should be classified under Chapter 60 of the Tariff, but the Tribunal found the expression "man-made textile material" to be broad, covering fabrics from Chapters 54 and 55 as well. The Tribunal noted that knitted or crocheted fabrics impregnated, coated, or laminated were not covered by Chapter 60.

Precedent and Definition of Textile:
Referring to a Supreme Court case, the Tribunal emphasized that the term "textile" had a wide connotation, encompassing fabrics woven from various materials. The Court's observation clarified that any yarn woven into a fabric constituted a textile, regardless of the weaving method used.

Decision on Classification:
Given that the base fabric was man-made and fell under the category of man-made textile materials, the Tribunal upheld the classification under sub-heading No. 5903.29. The Tribunal reiterated that sub-heading 5903.99 was a residuary category applicable only when goods were not classified under a specific entry like 5903.29.

Limitation and Show Cause Notice:
Regarding the limitation period for raising demands, the Tribunal found that the demand was made within the normal limitation period. It was noted that a proper show cause notice had been issued, allowing the appellant to present their case before the Assistant Collector, who determined the classification after following principles of natural justice.

Final Decision:
Ultimately, the Tribunal concluded that the Collector's classification decision was correct both on merits and within the prescribed limitation period. The appeal was dismissed, affirming the classification of the laminated fabrics under sub-heading No. 5903.29 of the Central Excise Tariff.