2014 (10) TMI 51 - AT - Central Excise

Exemption of Notification 6/2000-C.E, dated 1st March, 2000 - Sr. No. 164 - Exemption denied on the ground that it only applied to fabrics of cotton, and the fabrics that the applicant dyed were a mixture of cotton. - Held that - appellants were processing the knitted fabrics containing cotton, viscose and cotton where the polyester predominates. Even appellant is claiming the classification under sub-heading 6002.49 Notification No. 6/2000-C.E., dated 1-3-2000 Sr. No. 164 - Obviously, the Textile Material used by them was of man-made fibre and would therefore not be covered by the said entry and moreover, they were further processing the goods using winches, Jet-dyeing and Tubular Dryer, etc. - Decided against assessee

Summary

Issues:
1. Interpretation of exemption notification under Central Excise Tariff Act.
2. Valuation of fabrics for determining duty payable.

Analysis:
1. The case involved the interpretation of exemption notifications under the Central Excise Tariff Act. The appellant was engaged in dyeing hosiery fabrics and claimed exemption under entry 163 of notification 6/2000. However, the exemption was denied as it applied only to fabrics of cotton, while the fabrics dyed by the appellant were a mixture of cotton. The appellant argued for exemption under entry 164, which exempts goods of Chapter 60 not subjected to further processes and no modvat credit availed. The Tribunal remanded the matter to the Commissioner (Appeals) to consider the material presented by both sides.

2. The Commissioner (Appeals) concluded that the appellant was not entitled to exemption under notification 6/2000. However, the valuation aspect was accepted. The appellant contended that they were entitled to exemption under Sr. No. 164 of the notification and criticized the Commissioner (Appeals) for going beyond the remand direction. The appellant's main plea was for exemption under the said notification, emphasizing that only a single process was carried out on the fabric and no modvat credit was taken. The Tribunal examined the submissions and found that the appellant processed knitted fabrics containing cotton, viscose, and polyester predominating, which did not fall under the exemption criteria of the notification.

3. The Tribunal noted that the fabrics processed by the appellant using winches, Jet-dyeing, and Tubular Dryer did not meet the criteria for exemption under Sr. No. 164 of the notification. As the textile materials used were man-made fiber and further processing was carried out, the exemption did not apply. Consequently, the Tribunal upheld the impugned order and dismissed the appeal, emphasizing that there was no reason to interfere with the decision.

This detailed analysis covers the issues of interpretation of exemption notifications and valuation of fabrics for duty determination as addressed in the legal judgment by the Appellate Tribunal CESTAT MUMBAI.