2000 (3) TMI 248 - AT - Central Excise

Summary

Issues: Classification of fabrics under Notification 4/88 for concessional duty rate.

Analysis:
1. The appeal raised the issue of whether fabrics manufactured by the appellant would qualify for the concessional duty rate under Notification 4/88. The notification specifies a reduced duty rate for fabrics falling under Heading 54.09 of the Tariff containing nylon filament yarn, irrespective of the presence of fibres or yarn of cellulosic origin, including cotton.

2. The Commissioner (Appeals) classified the fabrics under Heading 54.09 but emphasized the identification of fabrics as nylon, cellulosic, etc., based on the major weight contents, relying on Note 2A of Section 11X(1) of the Tariff. The Commissioner concluded that for fabrics to be termed as nylon under the notification, the proportion of nylon must exceed 50% by weight, which was not the case for the appellant's fabrics containing less than 20% nylon.

3. The Tribunal disagreed with the Commissioner's interpretation, stating that the notification applies to fabrics containing nylon yarn, not solely based on the predominant weight of nylon in the fabric. The Tribunal clarified that as long as the fabric contains nylon yarn, it qualifies for the notification benefits, regardless of the percentage of nylon yarn by weight. Therefore, the Tribunal held that the appellant's fabrics, containing nylon yarn, are entitled to the benefit under Notification 4/88.

4. Consequently, the Tribunal allowed the appeal, overturning the Commissioner (Appeals)' decision and granting the appellant the benefit of the concessional duty rate specified in Notification 4/88 for fabrics containing nylon filament yarn under Heading 54.09 of the Tariff.