9911796707
TMI Blog1996 (6) TMI 257X X X X Extracts X X X X X X X X Extracts X X X X ..... Madurai seeks to set aside the Order-in-Appeal No. 202/89, dated 21-12-1989 of the Collector (Appeals). The assessee has claimed refund of the duty paid during the period December, 1974 to May, 1981 on the ground that duty levied under Tariff Item 19 III was wrong. The Collector (Appeals) remanded the matter to the Assistant Collector for considering the question of limitation as to whether there is valid protest or not, etc. The Department is seeking to set aside this order of the Collector (Appeals) and to restore Order No. 69/87, dated 12-7-1987 of the Assistant Collector dismissing the entire refund claim for the period December, 1974 to May, 1981 amounting to Rs. 3.09 crores. E/1852/90-D. - Collector of Central Excise, Madurai v. Fenner India Ltd. - The above appeal has been filed by the Department seeking to set aside the Order-in-Appeal No. 203/89-Mdu, dated 22-12-1989 and for restoring the order of the Assistant Collector of Central Excise, Madurai vide Order-in-Original No. 23/89, dated 8-3-1989 holding that Fenoplast PVC impregnated flame resistant colliery conveyor belting and Food quality PVC impregnated/coated cotton conveyor belting manufactured by the respondents f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no process as the base fabric has already come into existence prior to its impregnation with PVC compound. 5. We reproduce below Para 4 of the judgment of the Supreme Court containing the ratio and reasoning. "In view of the higher percentage of PVC compound in commodity, it becomes difficult to treat the ultimate goods as man-made fabrics for holding that it is covered by Item 22. Upon this analysis is follows that the Tribunal came to the correct conclusion when it held that the goods were not covered by Item 22 and, therefore, the residuary Item 68 applied. All these appeals are without any merit and are dismissed. Each of the respondents should be entitled to its costs." 5.1. The weight of PVC compound was 56% in the above case. The Supreme Court held that with this percentage of PVC compound the final product can no longer be described as fabric. The Department has relied upon Para 3 of the Supreme Court judgment to hold that the facts of that case are different from the facts of these cases. Para 3 which is relevant is reproduced below : "It is accepted that yarn is woven into fabrics. Item 19 deals with cotton fabrics while Item 22 deals with man-made fabric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... characteristics of a fabric. It would not in our view, be proper or correct to treat this final product as an impregnated, coated or laminated fabric, merely because there is a fabric embedded inside it." A perusal of above makes it clear that merely because a fabric was used as a starting material and PVC compound was coated, the belting cannot be classified as fabric under Tariff Item 19 and the degree of coating with PVC compound in the present case excludes the conveyor belting from the purview of the expression "fabrics". 6. Learned CDR's reliance on the order of the Tribunal in the case of Simplex Mills Ltd. v. C.C.E., Nagpur, Order No. E150 to 161/92-D, dated 28-2-1992 for the purpose of establishing the existence of a class of fabrics known as Industrial fabrics, does not advance the case of the Department, as the decision has been rendered in the context of 1985 Tariff and even Para 35 of the Simplex Mills order sets out that there has been a total restructuring of the Tariff in 1985 and the previous Tariff Item 19 and 22 of the erstwhile Tariff had a broad heading encompassing all kinds of textile and fabrics and also included industrial textile fabrics, as had bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts A material from which suits are made. Articles made from the fabrics called suiting. (ii) Mosquito Netting Mosquito Nets Material from which nets are made. Articles made from the fabrics called mosquito netting. (iii) Towelling cloth Material from which towels are made. Towels -Articles made from fabric called towelling cloth. 13. The above examples have been picked up from Notification No. 41/65 as amended from time to time, but can be multiplied. 14. It is interesting to note that in the Notification No. 70/69 as amended by Notification No. 222/69 etc. from time to time, providing for exemption to cotton fabrics falling under sub-item 1 of Item 19 Entry (XII) reads as follows : "Unprocessed cotton hose and pipes and belting woven as such", which shows that the Government considered belting as an item falling under sub-item 1 of Item 19 but exempted from the whole of duty of excise leviable thereon in terms of this Notification. 15. I also observe that these aspects were not noticed by the Tribunal in its order in the Multiple Fabrics case reported in 1984 (16) E.L.T. 301. In this case, the Tribunal while referring to the new Encyclopaeida of Text ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c containing 42.3 per cent by weight of cotton, whereas the Hon'ble Supreme Court in its order notes that it is clear that there was no pre-existing base fabric and the manufacturing process simultaneously brought into existence the commodity by weaving yarn into fabric and application of PVC compound and it was with reference to this context that it gave the verdict keeping in view the higher percentage of PVC. 21. In our case the Assistant Collector has emphasized that the base material is a fabric woven in a specially adopted loom in multiply solid weaving. The yarn used for weaving is a mixture of cotton yarn and nylon yarn. The woven material is then passed through air tank containing Polyviny1 Chloride compound and the finished product is obtained. The PVC is thus impregnated in the fabric. 22. I consider in the above context that on one hand, we have to take note of the extended meaning given to the word `cotton fabrics' in the Central Excise Tariff which covers not merely fabrics as normally understood in trade or common parlance but includes products made of cotton fabrics including those prepared by subjecting them to various processes or treatment or which ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the term `belting duck' is defined as a term for the fabric employed in the manufacture of belts used for the transmission of power or for conveying materials such as coal iron ore etc. ... Belting ducks are made in a wide range of constructions and widths to the specifications of the belt manufacturer. They are woven with the strength predominantly in the direction of the warp; 30. And the term transmission belting means "a heavy fabric which is usually made in `V' form or flat" (as per extracts from Fairchild Dictionary of Textiles); 31. Further while referring to transmission or conveyor belting of textile material the Bench had observed, inter alia, that `belting' is always in running length and can be with or without reinforcement, or impregnation or coating. 32. It is true that the Tariff was restructured after the period to which our case relates. But that does not mean that we cannot take note of the observations and findings of the Bench regarding the nature and type of material as culled out from a study of various authoritative works including encyclopaedias and dictionaries and the way this material is commonly known and treated in the trade and ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than by weight of non-cellulosic fibre or yarn or both as evident from the proviso to Tariff Item 19 which emphasizes that the predominance or percentage shall be in relation to the base fabric. The total percentage of PVC compound in the product as a whole is, therefore, not material or relevant in view of this specific provision in the entry itself. Hence the Chemical Examiner's report does not help the assessee. 42. Further according to the Department, the order of the Assistant Collector, dated 2-4-1976 has not been set aside or modified by any higher authority; And even according to the respondents, after the order of the Appellate Collector, dated 30-6-1976 (by which their appeal against the AC's order, dated 2-4-1976 was rejected) no further proceedings were taken in relation to that order. Therefore, the assessees were no longer free to re-open the issue on the basis of the same facts and same provisions of law and the successor Assistant Collector was justified in taking note of an already existing order of Assistant Collector in force. 42.1. Since the impugned order of the Collector (Appeals) ignores the above aspects, it was defective on this score as well. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d but it was not open to the Respondents to reagitate the matter on the basis of the same facts and provisions of law. There could therefore be no question of remand in Appeal No. E/1852/90-D. The matter having been concluded by the judgment of the Hon'ble Apex Court in case of Fenoplast (P) Ltd. v. C.C.E., Hyderabad, decision of the Collector (Appeals) holding goods are classifiable under Item 68 is wrong. 48. Arguing for the Respondents ld. Counsel fairly conceded that since then a view contrary to the view expressed in case of Multiple Fabrics P. Ltd. has been held by the Apex Court. He, however, forcefully argued that the goods were impregnated with Vinyl Chloride and therefore such cotton fabrics cannot be considered, within the meaning of Tariff Item 19(III), as impregnated or laminated with preparations of cellulose derivatives or of other artificial plastic materials. He submitted that the Hon'ble Apex court in the case of C.C.E. v. Fenoplast P. Ltd. did not give any specific finding as to whether the material in question was impregnated with artificial or synthetic material other than materials mentioned in Tariff Item 19. The cotton fabrics lost their identity as co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rics and Parliament's power to do so cannot be questioned. To start with, it is a cotton cloth upon which coating material is applied. The Apex Court therefore held that while cotton fabrics fall under sub-item 1 of Item 19, other three categories included within the ambit of cotton fabrics fall under sub-item (ii), (iii) and (iv) respectively. 51. I now take up the second contention that coating material is neither preparation of cellulose derivatives nor "other artificial plastic material". It was argued that product in question is coated with Polyvinyl Chloride which is a synthetic resin and is different from artificial resins. 52. I find this very question was specifically raised before the Hon'ble Apex Court in case of C.C.E. v. Fenoplast (P) Ltd. where Apex Court rejected the contention and held that the coating material employed by the Respondents in this case was predominantly, if not wholly, "other artificial plastic material." Even the plea of remand for arriving at a finding in regard to this aspect was rejected. In view of the reasons set out in Paragraph 37 and 42 of the ld. Vice President's order I agree that the Refund claims were time-barred as also not ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
