1999 (10) TMI 144 - AT - Central Excise

Summary

Issues:
Classification of processed fabrics under Heading 5804.12 or 6001.12.

Analysis:
The appeal before the Appellate Tribunal CEGAT, New Delhi involved a dispute regarding the classification of processed fabrics by the appellants, who claimed they were knitted fabrics under Chapter sub-heading 6001.12, while the Department contended they were lace under Chapter sub-heading 5804.12. The Department relied on a test report by the Deputy Chief Chemist supporting their classification as lace. The Commissioner (Appeals) also considered technical literature, noting that the fabrics were produced using a raschel knitting machine, which can create various fabrics including lace. The appellants, represented by Shri Gopal Prasad, argued that an expert opinion from SASMIRA classified the fabrics as knitted, which was not considered by the lower authorities. They emphasized the importance of the Harmonized System of Nomenclature (HSN) notes for distinguishing between knitted fabrics and lace.

The Department, represented by Shri R.S. Sangia, contended that the Commissioner (Appeals) thoroughly examined the issue, including expert reports and technical literature, concluding that the processed fabrics were lace, falling under the specific entry of Chapter Heading 5804.12. They argued against remanding the case, stating that the appellants did not present the expert opinion before the Assistant Collector and did not raise the issue of HSN notes during the earlier proceedings.

Upon hearing the arguments, the Tribunal noted the absence of a distinct definition in the Central Excise Tariff for classifying lace differently from knitted fabrics. Acknowledging the conflicting opinions of the experts and the significance of the HSN Explanatory Notes, which provide a detailed distinction between lace and knitted fabrics, the Tribunal found that the lower authorities did not consider the HSN notes. Consequently, the Tribunal deemed it appropriate to remand the case to the Assistant Commissioner for reevaluation in light of the HSN Explanatory Notes, emphasizing the persuasive value of HSN after the alignment of the Central Excise Tariff with the HSN model.

In conclusion, the appeal was allowed by way of remand, directing a reexamination of the processed fabrics in accordance with the HSN Explanatory Notes to determine the correct classification under the relevant tariff headings.