Central Excise - Knitted fabrics - Classification and assessment of knitted pile fabrics - Matter regarding - Central Excise - 14 /Knitted fabrics/89/ CX.1

Central Excise - Knitted fabrics - Classification and assessment of knitted pile fabrics - Matter regarding Circular No. 14 /Knitted fabrics/89/ CX.1 Dated 16-10-1989 [From F. No. 60/2 /87-CX.1] Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Central Excise - Knitted fabrics - Classification and assessment of knitted pile fabrics - Matter regarding. A doubt has been raised as to the classification and assessment of knitted pile fabrics, commonly known as 'fur fabrics' whether as processed or unprocessed fabrics. 2. Knitted pile fabrics are basically furnishing fabrics with high pile of loose and soft fibres of acrylic/polyester/polypropylene fibre that are firmly held in position by the yarn which is introduced in the high pile knitting machines. The loose fibre i.e. acrylic in this case, in silver form is fed into the machine together with the base yarn (cotton yarn). The various colour patterns and designs are set with the help of jacquard arrangements. The knitted high pile fabrics consist of desired length of fibre staples which protrude out. During manufacture the compressed raw fibres are loosened, then opened up and dyed in the steam vessel in required shades and the dyed fibres are again opened up. The blown fibre is brushed in a parallel manner to bring about silver on the carding machine. The fibre in silver form is then fed into the silver knitting machine. The fabrics consist of plain jersey backing yarn interlaced with carded fibre (mostly acrylic) in the ratio of 20% to 30% yarn and 80 to 70% silver. The staple fibre is combed into the machine to create a directional pile. The pile is then locked into the construction by the looping action of the backing yarn over the knitting needle. The knitted fabric is subjected to a process of back-coating and shearing. In this process of back-coating, the backing yarn is given a light coating of acrylic emulsion to fasten the fibre held in the yarn loop. The acrylic emulsion is water based and hence the fabric has to be dried for which it is passed through hot air stenter. After drying, the excess height of the loop is cut by the shearing machine and finally lustre is given by electrifying polish. 3. Since knitted pile fabrics is subjected to a process of back-coating, shearing and electrifying polish and other processes discussed above it is clear that the said fabrics is a processed fabrics. Further, "textile fibre form a carded silver inserted into the loops of a knitted ground fabrics as it is formed" are included in Note 3 of Explanatory Notes under heading No. 6001 of H.S.N. Thus knitted pile fabrics is classifiable under heading No. 6001.12 of the Central Excise Tariff. 4. Regarding base fabrics for the purpose of charging duty under Notification No. 109/86-C.E., dated 27-2-1986, these fabrics are predominant in acrylic fibre which is upto 64% by weight of the total fabrics. So the corresponding base fabrics for this particular fabric is to be under heading No. 55.08 as the goods in question are processed with the aid of power and cannot be considered as unprocessed. 5. Prior to 9-12-1987 i.e. date of issue of Notfn. 260/87-C.E. the knitted fabrics of heading No. 60.01 were assessed by applying Notfn. 109/86-C.E., dated 27-2-1986 as amended. For the period from 9-12-1987 to 18-1-1988 there is a little anomaly as two notifications namely Notfn. 109/86-C.E. and 260/87-C.E. are equally applicable for the said fabrics. But notification No. 260/87-C.E., dated 9-12-1987 is more appropriate as this notification is specifically issued for the fabrics falling under sub-heading No. 6001.12. As there is no mention of processed or unprocessed fabrics in this notification, this is applicable to both the categories of fabrics. For the period from 19-1-1988 them should not be any confusion as their notification No. 3/88-C.E., dated 19-1-1988 excludes processed fabrics falling under sub-heading No. 6001.12 from the purview of Notfn. 109/86. The effective rate of duty for the fabrics of sub-heading No. 6001.12 have been specified in Notfn. 2/88-C.E., dated 19-1-1988 and knitted or crocheted fabrics of man-made textile material falling under sub-heading No. 6001.12 whose value per sq. mtr. exceeds Rs. 25/- the tariff rate of duty will be applicable if there is no other exemption available.