2001 (4) TMI 305 - AT - Central Excise

Summary

Issues:
Classification of piled Acrylic Fabrics under Central Excise Tariff Act - Additional Duties of Excise (Goods of Special Importance) Act, 1957 - Marketability of the goods.

Classification Issue:
The appeal questioned whether piled Acrylic Fabrics in running length should be classified under Heading No. 60.01 or 63.01 of the Central Excise Tariff Act. The Respondent classified the goods under sub-heading 6001.92 for captive use, claiming nil duty under Notification No. 67/95-C.E. The Deputy Commissioner demanded duty under the Additional Duties of Excise Act, stating the benefit of the notification did not apply. The Commissioner (Appeals) set aside the duty, citing lack of proof of marketability. The Appellant argued that the goods were marketable, unlike the intermediate product in a precedent case. They contended that the goods were durable, saleable, and not solely used for captive purposes, emphasizing the continuous length and absence of un-woven threads. They referred to a Tribunal case to support their stance that minimal processes like drying and cutting do not negate classification.

Marketability Issue:
The Respondent argued that knitted fabrics (processed) were not marketable as goods, citing a Tribunal case. They referenced Note 5 to Section XI of the Central Excise Tariff Act to support their classification under Chapter 63, not Chapter 60. They relied on a previous decision that quilted fabrics in running length were not liable for duty due to lack of proof of marketability. The Appellant countered, asserting that the goods were marketable and could be purchased by those unable to manufacture them to create blankets of varying sizes. The Tribunal noted a precedent case where knitted fabrics at an intermediate stage were deemed to have transformed into blankets, lacking distinct marketability as separate goods.

Judgment:
The Tribunal upheld the decision rejecting the appeal filed by the Revenue. They applied the precedent case's reasoning that the impugned goods lacked marketability and had acquired all essential characteristics of blankets. The Tribunal concluded that the goods did not constitute a distinct saleable commodity and therefore should not be classified separately. The decision was based on the absence of evidence indicating market recognition or distinctiveness of the goods in question.