2000 (8) TMI 559 - AT - Central Excise

Summary

Issues involved: Classification of goods under Central Excise Tariff Act, 1985 - Conflict in classification between Chapter Heading 52.05 and Chapter Heading 59.09.

Detailed Analysis:

1. Background and Parties Involved:
- The appeals were directed against an Order-in-Original by the Collector of Central Excise concerning the classification of goods manufactured by a company and purchased by others.
- The appellants were engaged in manufacturing cotton yarn, man-made yarn, and fabrics falling under specific chapters of the Central Excise Tariff Act, 1985.

2. Principal Issue:
- The main issue revolved around the classification of the product manufactured by the company under Chapter Heading 52.05 or Chapter Heading 59.09 of the Central Excise Tariff Act, 1985.
- The dispute arose due to the classification declared by the company as "grey coarse canvas" under Chapter Heading 52.05, while the Department claimed it should be classified under Chapter Heading 59.09.

3. Adjudication and Decision:
- The Collector of Central Excise framed three issues for determination, primarily focusing on the classification of the filter fabric manufactured by the company.
- The Collector ruled in favor of the Revenue, classifying the product under Chapter Heading 59.09 and imposing duty and penalties on the company and its Executive Director.
- Goods seized from the company and authorized dealers were also confiscated with options for redemption upon payment of fines.

4. Arguments and Precedents:
- The appellants relied on a Tribunal decision in a similar case involving the same company, where the item was classified under Chapter Heading 52.05, supporting their classification claim.
- The Revenue contested the arguments by citing an earlier Tribunal decision classifying similar products under Chapter Heading 59.09, emphasizing the acceptance of the decision by the concerned party.

5. Conflicting Decisions and Trade Notice:
- Conflicting decisions by different Tribunal Benches on the classification of the product led to a directive for a Larger Bench to resolve the issue conclusively.
- A Trade Notice clarified the classification of "filter fabrics" under Tariff sub-heading 5909.00, providing additional context to the classification dispute.

6. Direction for Resolution:
- Due to the conflicting views and the importance of resolving the classification issue definitively, the matter was referred to the Honorable President for constituting a Larger Bench to decide the classification of the product in question.

This detailed analysis encapsulates the legal intricacies and conflicting interpretations surrounding the classification of goods under the Central Excise Tariff Act, 1985, emphasizing the need for a conclusive resolution through a Larger Bench decision.