1998 (7) TMI 249 - AT - Central Excise

Summary

Issues:
Classification of Leno Fabrics under Tariff Item 52.05 or 59.09.

Analysis:
The case involved a dispute over the tariff classification of Leno Fabrics manufactured during 1987 and 1988. The appellants claimed classification under Tariff Item 52.05 for cotton fabrics not subjected to any process, while the Revenue classified the fabric under Tariff Heading 59.09 for textile products suitable for industrial use. The process of manufacture involved weaving cotton spun yarn on looms without coating or impregnation, and the fabric was despatched unprocessed. The authorities argued that the fabric, used in the tea industry for withering tea leaves, was an industrial product ready for use, falling under Heading 59.09. However, the appellants contended that as the fabric was sold unprocessed and not subjected to further treatment, it should be classified under Heading 52.05, citing an Order-in-Appeal supporting their position.

The Tribunal analyzed the classification issue, noting that Chapter 59 encompassed textile fabrics subjected to processing after weaving. Heading 59.09 referred to "all other textile products," implying a connection to previous headings in the chapter. The Tribunal emphasized that the fabric's use in the tea industry did not automatically classify it as an industrial product, especially when alternative uses were possible. Considering the manufacturing process and the absence of further treatment, the Tribunal concluded that the fabric aligned more closely with Tariff Heading 52.05 than 59.09. Therefore, the appeal was allowed in favor of the appellants, granting them consequential relief.

This detailed analysis of the classification dispute highlighted the importance of considering the manufacturing process, lack of additional treatment, and the context of related tariff headings in determining the appropriate classification for Leno Fabrics. The decision clarified that the fabric's use in the tea industry did not override its primary characteristics for tariff classification, ultimately leading to a favorable outcome for the appellants under Tariff Heading 52.05.