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TMI Blog1993 (4) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... novo order, the Asstt. Collector issued a show cause notice dated 13th August 1990 proposing classification under chapter sub-heading 5901.10. In the meantime, samples were drawn in July 1989 and sent for Chemical Test. The party also filed fresh classification No. 2/89-90 1/90-91 w.e.f 20-3-1990 1-4-1990 respectively. The same were also approved by Asstt. Collector under chapter sub-heading 5901.10 of Central Excise Tariff, 1985 without following the procedure. The party again filed two appeals before Collector (Appeals) who confirmed the order passed by the Asstt. Collector. 2. In his report dated 24-10-1990, the Chemical Examiner has stated as follows: It is noticed that the Heading 59.05 has been deleted in the present Central Excise Tariff 1990-91. For the reasons already stated, the sample of adhesive tape under reference may be covered under Heading 59.01 and 59.09 Central Excise Tariff. I am of the opinion that it would be more appropriately covered under 59.06.90 of Central Excise Tariff as Textile fabrics not otherwise impregnated coated or covered other." In his report dated 26-9-1990, the Chemical Examiner has stated that The same is a tape in the form of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should not be recovered. The assessee filed the reply dated 15-11-1990 reiterating their earlier stand. However, the Asstt. Collector passed order-in-original dated 16-4-1991 confirming the demand raised by the Superintendent. The assessee contended that this order of Asstt. Collector is contradictory to his earlier order-in-original dated 19-3-1991 and 5-4-1991. 5. The Collector (Appeals) in his impugned order confirmed the classification of the goods under Heading 5905.00 upto 19-3-1990 and under Chapter Heading 5906.90 from 20-3-1990. He set aside the Asstt. Collector s order dated 16-4-1991 to the extent that the demand is enforceable only for the period of six months, immediately prior to the issue of the show cause notice. The Revenue is aggrieved with this portion of the order and they have also filed a cross appeal. 6. The assessee is contending that the chapter sub-heading 5901.10/5905/5906 relate to adhesive coated fabrics which is their intermediate product used captively for manufacturing adhesive tapes. They state that adhesive coated fabric has a sticky surface and it has no shelf life, and it cannot be stored, packed and removed out for sale and that it has no m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 11,441.86 is required to be set aside, as it is contradictory to the earlier order dated 19-3-1991. He contended that the goods is in the form of cloth based self adhesive tapes and it is not a coated fabric and Headings 5905 and 5906 refers to coated fabrics and not tapes and therefore, the classification under this sub-heading is not at all appropriate. He pointed out to Section Note 1 of Section XI which refers to exclusion clause wherein tape is not mentioned and hence tape has to be brought in Section XI only. Chapter Heading 5909.00 covers all products of industrial use and this item is being cleared to industries, who are availing Modvat facility, which is available only to industrial products. The goods are textile products. By applying Rule 3(c) of Rules of interpretation, they are appropriately classifiable under Heading 5909. He urged that the Department has taken two yardsticks one for valuation as tape and another as textile fabric for classification purpose. The Department has also discriminated the assessee from other manufacturer s whose similar item has been classified under Heading 5909. He submitted that the item is entitled for benefit of Notification No. 5/87 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aminer reports, the Assistant Collector readjudicated and approved the classifications chapter under Heading 59.05 upto 19-3-1990 and under chapter sub-heading 5906.90 from 20-3-1990 in respect of classification 1/90-91 and 2/89-90. The Asstt. Collector had adjudicated two orders one pertaining to classifications and another pertaining to show cause notice dated 5-11-1990 issued by Supdt. of Central Excise demanding differential duty of Rs. 11,441.86. The show cause notice had been issued on the basis of Chemical Examiner s report dated 24-10-1990, although, the Asstt. Collector had already issued revised show cause notice dated 15-11-1990 on the basis of the Chemical Examiner s report for change in classification. The Collector (Appeals) has upheld the classification adopted by the Ld. Asstt. Collector but has set aside the demands for larger period in the demands made in the show cause notice issued by Supdt. The Revenue is aggrieved with this portion of the order and have filed a cross appeal. 10. The Collector (Appeals) at para 7 of his order has held as follows : 7. As seen from the impugned order, the process of manufacture of the tapes is by coating of rubber compound w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a textile product covered under Heading 59.09 of the Central Excise Tariff. The end use of the products are also not for industrial use. Chapter note 7(a)(i) of Chapter 59 clearly mentions the types of goods that will fall under this Heading and going by the same, the tapes in question clearly fall outside the purview of Heading No. 59.09. Therefore, and also for the reasons already adduced in the impugned order, the subject tapes clearly fall under 5905 upto 19-3-1990 and under chapter Heading 5906.90 from 23-3-1990". 11. At the outset, it has to be observed that both the lower authorities have been misled by the report of the Chemical Examiner. The Chemical Examiner has wrongly opined that Heading 59.05 has been deleted from Central Excise Tariff, 1990-91. The lower authorities have not even cared to check on this. They have mechanically without even applying their mind passed the order accepting the suggested classification by the Chemical Examiner. The Asstt. Collector in the first instance had committed an error in asking the opinion of Chemical Examiner with regard to the classification of the product. It is the duty of the adjudicating authorities to determine the classif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll in any other heading of Section XI: (a) Textile products in the piece, cut to length or simply cut to rectangular (including square) shape (other than those having the character of the products of heading Nos. 59.07 and 59.08), the following only :- (i) Textile fabrics, felt and felt-lined woven fabrics coated, covered or laminated with rubber, leather or other material, of a kind used for card clothing and similar fabrics of a kind used for other technical purposes; (ii) Bolting cloth; (iii) Straining cloth of a kind used in oil presses or the like, of textile material or of human hair; (iv) Flat woven textile fabric with multiple warp or weft, whether or not felted, impregnated or coated of a kind used in machinery, or for other technical purposes; (v) Textile fabrics reinforced with metal, of a kind used for technical purposes; (vi) Cords, braids and the like, whether or not coated, impregnated or reinforced with metal, of a kind used in industry as packing of lubricating material. (b) Textile articles (other than those of heading Nos. 59.07 and 59.08) of a kind used for technical purposes (for example, textile fabrics and felts, endless or fitted with linking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 59, the chapter Heading 5905 deals with rubberised textile fabrics . The reading of note 4 of Chapter 59 alongwith Heading 59.06 also makes it very clear that the products to be included in Heading 5906 is Textile fabrics otherwise impregnated, coated or covered with exceptions to those items referred in note 4 of Chapter 59. 18. The product in question is not rubberised fabric or textile fabric impregnated, coated or covered hence both Headings 5905 5906 of CET, 1985 have to be excluded. As stated earlier, HSN note to Chapter 5906.10 referred specifically to adhesive tape of a width not exceeding 20 cm. and note (E) to 5906 also refers specifically to Adhesive tape, including electrical insulating tape, in which the backing is of a textile fabric, whether or not previously rubberised and the adhesive of rubber . In view of this note to HSN, the Asstt. Collector appears to have been misguided to classify under Heading 5905, but as observed earlier, the chapter Headings in 5905 5906 of Central Excise Tariff, 1985 with HSN Notes not been aligned specifically, and as can be seen adhesive tape not having been mentioned in these sub-headings the reliance on HSN is total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee in the technical write up given in the paper book have further added that Adhesive compound coated on release paper is passed through drying chambers and then laminated on cloth whereby the adhesive compound transferred to the cloth enables itself to be easily rolled and slitted before the release paper could be taken out. Alternatively, the adhesive compound is coated directly on the cloth itself with sufficient care and expertise . 23. The Asstt. Collector has noted in his order that the product is used for as known to us this is used for packing purpose . While the assessee are claiming that the product is for packing purpose only in the various types of industrial units . However, the Deptt. is admitting that the tapes are being made as per the specifications given by the customers and it is also noted that the customers are generally industries. As can be seen from the reading of the chapter sub-heading 5909 of Central Excise Tariff, 1985, the items to be covered are not just only articles of a kind suitable for industrial use but it refers to all other textile products . Now the question is as to whether this product can be brought under 5909 as a textile product ..... X X X X Extracts X X X X X X X X Extracts X X X X
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