2000 (3) TMI 577 - AT - Central Excise

Summary

Issues:
Classification of knitted cotton fabrics and other knitted fabrics containing elestomeric yarn.

Analysis:
The appeals revolve around the classification of knitted fabrics containing elestomeric yarn, specifically whether they fall under sub-heading 6002.92 or 6002.30. The appellants argued that the fabric should be classified under 6002.92 based on the predominance of cotton in the composition, citing Note 2(A) of Section XI of the Tariff. They emphasized the importance of predominance of textile material in classification, supported by Interpretative Rule 5. On the other hand, the respondent contended that fabrics containing elastomeric yarn should be classified under the specific heading 6002.30, which prevails over the general heading 6002.92. The issue of whether chapter notes and section notes could take precedence over specific notes was crucial in this classification dispute.

The Tribunal examined the conflicting arguments in light of previous precedents. Referring to a case involving Saurashtra Chemicals, it was established that section notes and chapter notes in the Tariff have an overriding force on respective headings, influencing the interpretation and application of tariff headings. The Tribunal's decision in the Customs Tariff context was deemed applicable to the Central Excise Tariff due to the similarity between the two tariffs and the absence of any prohibition. The Apex Court's confirmation of this approach further solidified the significance of section notes and chapter notes in classification disputes.

Ultimately, the Tribunal applied the principles derived from previous decisions to the current case. Following the Apex Court's ruling in a similar matter, it concluded that the knitted fabrics containing elestomeric yarn should be classified under Chapter 6002.92 based on the predominance of textile material. By aligning with the established legal framework and precedence, the Tribunal allowed the appeals in favor of the appellants, resolving the classification issue in their favor.