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TMI Blog1985 (7) TMI 212X X X X Extracts X X X X X X X X Extracts X X X X ..... pillow covers. The appellants are paying duty thereon under the residuary Item 68 of the Tariff. The dispute in this appeal is about the remaining items only. 3. Before going into the nature of the dispute in detail, if would be helpful to notice the material portions of Tariff Item No. 19 :- 19. Cotton fabrics :- Cotton fabrics means all varieties of fabrics manufactured either wholly or partly from cotton and includes dhoties, sarees, chaddars, bed-sheets, bed-spreads, counter-panes, table-cloths.............................. I.............................................................................. (a) cotton fabrics, not subjected to any process, (b) cotton fabrics, subjected to the process of bleaching, mercerising, dyeing, printing, water-proofing, rubberising, shrink proofing, organdie processing or any other process or any two or more of these processes." 4. The appellants submitted a classification list effective from 4-4-1984 for approval of the Central Excise authorities. In the said classification list, they listed the following four items as not liable to duty :- 1.Cotton Double Bed Sheets (Printed) 2.Cotton Single Bed Sheets ( ) 3. Cotto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to show that the textile trade regarded the processes of cutting, hemming and stitching as manufacturing processes. (4) Taking us to the history of evolution of Tariff Item No. 19, the appellants contended that no reliance could be placed on the retrospective amendments made to the Tariff entry as well as to Section 2(f)(v) of the Central Excises and Salt Act, 1944 by the Central Excises and Salt and Additional Duties of Excise (Amendment) Act, 1980 as the stated object of this amending Act was only to cure the defects found by the Gujarat High Court in relation to processing of cotton fabrics. (5) Reading Item 19-I(b) of the Tariff along with Section 2(f)(v) of the Act, and applying the principle of Ejusdem Generis, it was clear that the words any other process occurring in the entry could refer only to unspecified processes which were in the nature of textile finishing processes, and not to the processes of cutting, hemming and stitching. (6) The Central Board of Excise and Customs, through their Tariff Advices of 1980 and 1983, had advised the Collectors that towels and blankets (which too were made by cutting and stitching from fabrics in length) fell under Item 19 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The appellants have relied on the Delhi High Court judgment in the case of Dayal Weaving Factory (Civil Writ No. 346 of 1969 decided on 12-8-1970). We find no pronouncement in the said judgment to the effect that sheeting cloth in running length was the same thing as bed-sheets. The facts of that case as well as the Tariff entry at that time were different. Item 19-I was at that time divided into the following two sub-items :- 19.I. Cotton fabrics other than (i) embroidery in the piece, in strips or in motifs, and (ii) fabrics impregnated or coated with preparations of cellulose derivatives or other artificial plastic materials- (1) Coating, suiting, tussors, corduroy, gabardine, bed-ford, satin, denim, lappet, lace, knitted fabric, tapestry, furnishing fabric including jacquard curtain cloth, gadlaped, mattress fabsic, terry towel including turkish towel, terry towelling cloth including turkish towelling cloth, blanket, canvas, duck, filter cloth, tracing cloth and bukram cloth. (2) Others- x x x x" The petitioners in that case were manufacturers of bed-sheets on powerlooms. They had been paying a nominal duty determined on the basis of a compounded rate per loom per sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for factual discrimination at the hands of the taxing authority and this argument must also fail." Keeping in mind the context of the points of dispute in the said writ petition, it is quite clear that when their Lordships of the Delhi High Court were referring to the quality of the cloth, they meant the popular meaning given to the cloth in the shape it was at the time of clearance. The question whether bed-sheets were the same thing as cloth in running length was neither placed before the High Conrt nor did the High Court come to any finding on this question even by way of an obiter. 8. The appellants have laid great stress on their plea that no rate of duty is specified against bed-sheets, bed-covers, table-cloths etc. However, we find that it is not so. As would be seen from the wording of the tariff entry reproduced in paragraph 3 above. Item 19 contains an extended definition because of the inclusive clause therein. Articles like bed-sheets, bed-covers, table-cloths etc., though considered made-up articles in common parlance, have, for the purpose of tariff entry, been deemed to be cotton fabrics. This definition of cotton fabrics occurs in the main item at the beginn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain under Item 19-I(b) under which the processed fabrics from which they are made were classifiable." The appellants reiterated this in paragraph 2 of their written appeal memorandum submitted to the Collector (Appeals). We quote :- They stated that at fabric stage the goods had already paid duty under Tariff Item 19-I(b) and that the same classification continues even after the conversion of the fabric into bed-sheets, bed-covers, napkins, etc. It was submitted that since the tariff item or sub-item had not changed, there was no ground for the Department to levy duty again on those products. 9. Coming to the point whether the processes undertaken by the appellants should be regarded as processes of manufacture or not, we observe that by undertaking the processes of cutting, hemming and stitching, the appellants bring into existence new articles (bed-sheets, bed-spreads, table-cloths, etc.) which the Parliament has chosen to expressly specify as excisable goods in Tariff Item 19. The said processes have, therefore, to be regarded as processes of manufacture. A Division Bench of the Delhi High Court has held in the case of Hyderabad Asbestos Cement Products Ltd. and anothe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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