Central Excise - Classification and excisability of 'Jute Caddies' under the CETA, 1985 - Clarification regarding - Central Excise - 21/90

Central Excise - Classification and excisability of 'Jute Caddies' under the CETA, 1985 - Clarification regarding Circular No. 21/90 Dated 11-9-1990 [From F. No. 53/1/90-CX.1] Government of India Central Board of Excise Customs New Delhi Subject : Central Excise - Classification and excisability of 'Jute Caddies' under the CETA, 1985 - Clarification regarding. A doubt has been raised as to the classification of the jute caddies obtained during the process of manufacture in jute mills whether under 53.02 or 53.03 or 53.04 of the Central Excise Tariff. 2. Jute caddies arise during the process of manufacture of various final products in composite jute mills. Raw jute (an agricultural product) is sorted out and softened with emulsions. The same is then passed through carding, drawing and spinning processes respectively to produce various final products falling under Heading No. 53.02 of the Central Excise Tariff. Wastes arising during the above processes are collected by sweeping the floor. The wastes thus collected contain earth, moistures and Jute short fibres are called "Jute Caddies". Sometime these caddies are sold for a very nominal price for use in the manufacture of pads and felts. These caddies don't have any spinning quality. In ISI specification, IS : 5476-1969, jute caddies have been defined as "Short jute fibres dropping from different machines such as preparatory machines and looms during process". The chemical test of the sample of "Jute Caddies" states such caddies as "agglomerated mass essentially composed of Jute Fibres". Prior to introduction of new Central Excise Tariff, Board had decided that Jute Caddies were not liable to duty under the erstwhile tariff item 22A because such caddies were similar to raw jute than to jute manufactures. With the introduction of new Central Excise Tariff jute fibres have been exempted under Notification No. 52/87, dated 1-3-1987 if used for captive consumption. CCE, Calcutta-II is of the view that jute caddies are not liable to duty, however, CERA has raised objection that jute fibres are classifiable under Heading No. 53.04 as "other vegetable textile fibres". The jute caddies being short jute fibres would also appear to be classifiable under Heading No. 53.04. These will be eligible for exemption if consumed captively. If jute caddies are cleared, the same would be taxable under the aforesaid heading. 3. The issue was further examined in the Board. Jute fibres are specifically covered under HSN Heading No. 53.03. Similarly, tow waste of these fibres are also covered under this heading. However, yarn of jute and other textile bast fibres of Heading No. 53.03 are covered under Heading No. 53.07 of HSN. However, there is no entry in the Central Excise Tariff under Chapter 53 corresponding to HSN Heading 53.03 covering 'Jute and other textile bast fibres: tow and waste of these fibres'. Therefore, the jute fibres will come under the residuary entry 53.04 of CET. The Board therefore agreed with the views of the Best Zone Tariff Conference and is of the view that the jute caddies are short jute fibres classifiable under CET Heading 33.04 and they are eligible for exemption under Notification No. 52/87 if consumed captively in the factory of production and if they are cleared as such the same would be liable to duty. 4. Field formations and trade interests may be informed accordingly.