1999 (4) TMI 341 - AT - Central Excise

Summary

Issues involved:
Classification of 'filter fabrics' under Heading 52.05 or Heading 59.09.

Detailed Analysis:

1. Classification Issue:
- The main issue in this case pertains to the classification of 'filter fabrics', also known as 'grey canvas cotton fabrics', under either Heading 52.05 or Heading 59.09. The revenue contends for classification under Heading 59.09, while the appellants claim classification under Heading 52.05.

2. Arguments by Appellants:
- The appellants argue that Circulars issued by CBEC in 1988 and 1993 support their classification under Heading 52.05. They rely on Circular No. 22/88-CX. 1 and Circular No. 10/93, which categorize similar goods under Heading 52.05.
- They emphasize that Chapter 59 is excluded based on Note 6, as the goods can be classified under Heading 52.05. They also highlight that Heading 59.09 is of a residuary nature.

3. Precedent and Legal Support:
- The appellants cite legal precedents, such as Ranadey Micro Nutrients v. C.C.E. and Krishna Fruit Products v. C.C.E., to argue that Board's circulars are binding on the department for classification purposes.

4. Revenue's Arguments:
- The revenue refers to a Trade Notice by Madurai Collectorate stating that filter cloth should be classified under Chapter 59. They also argue that Chapter Note 6 of Chapter 59 is not exhaustive, as per a Tribunal decision in Simplex Mills Co. Ltd. v. C.C.E.

5. Judgment and Analysis:
- The Tribunal considers the binding effect of CBEC Circulars and concludes that the Circular of 1993, rescinded in 1997, applies to goods classified under Heading 52.05 for the relevant period. The Tribunal holds that the Circular's rescission does not have retrospective effect.
- The Tribunal dismisses revenue appeals for the period covered by Circulars of 1988 and 1993, as they are binding. However, for other periods, the Tribunal remands the matter for re-consideration based on the law established.

6. Final Decision:
- The Tribunal dismisses three revenue appeals and allows two appellants' appeals by remanding the matters for fresh consideration based on the applicable law. Both parties are granted the opportunity to present their case before the original authority.

In conclusion, the judgment clarifies the classification of 'filter fabrics' under specific headings based on CBEC Circulars and legal precedents, providing a detailed analysis of the issues involved and the reasoning behind the decision.