2000 (8) TMI 463 - AT - Central Excise

Summary

Issues: Classification of tubular impregnated fabrics for gas mantles under different tariff headings; Applicability of duty and notification benefits.

Classification of Tubular Impregnated Fabrics:
The judgment revolves around the classification of tubular impregnated fabrics manufactured for gas mantles under different tariff headings. The fabric in question is knitted from viscous rayon yarn, impregnated with chemicals necessary for the mantle's attributes, and used in kerosene lanterns. The tribunal analyzed the relevant tariff headings, specifically 59.08 and 9405.10, to determine the correct classification. It was established that the fabric for kerosene lantern mantles falls under 9405.10, not 59.08, due to the specific use and characteristics of the mantles. The presence of the word "therefor" in the tariff heading was deemed significant in limiting the classification under 59.08. The judgment highlighted the deviation in sub-heading 10 of the Indian Tariff from the HSN Explanatory Notes, leading to the exclusion of fabric for kerosene lantern mantles from heading 59.08.

Classification Under Residual Entry and Notification Benefits:
The tribunal also discussed the classification of the fabric under the residual entry of heading 59.09 for textile products suitable for industrial use. The Commissioner argued that the fabric, as an intermediate product, falls under this heading. However, the appellant contended that the fabric, in running length, did not qualify as a textile article under note 6 of the Chapter. The judgment emphasized that goods not in the piece or cut to shape could not be considered textile articles, especially if not adapted for a specific application. Additionally, the tribunal addressed the issue of duty and notification benefits, clarifying that the benefit of notification could not be denied based on the classification and liability to duty of the goods.

Penalty and Conclusion:
The judgment concluded by allowing the appeals, setting aside the impugned order, and determining that the demand for duty was not sustainable due to the incorrect classification by the department. Consequently, no penalty could be imposed, and arguments on limitation were not considered. The detailed analysis provided clarity on the classification of tubular impregnated fabrics for gas mantles, the applicability of duty, and the benefits of notifications under the relevant tariff headings.