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TMI Blog1999 (6) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... y jute fabrics, where the jute predominating by weight, was claimed to be classifiable under Heading 5306.29 as woven fabric of jute-other. Poly jute bag manufactured out of the said poly jute fabrics was classified under Heading 6301.00 as made-up textile article. The said heading attracted the prescribed rate of duty as 12% ad valorem. The Notification No. 65/87-C.E., dated 1-3-1987 as amended, exempted the various goods described in the said notification from so much of duty of excise leviable thereon as was in excess of the amount laid down in the correspondence entry in column 5 of the Table to the Notification. As per Sl. No. 6, sacks and bags of jute classifiable under Heading No. 63.01 attracted the concessional rate of duty of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e been manufactured has been classified by the Department as woven fabrics of jute, the bags manufactured out of the said fabric cannot be termed as anything else than the bags of jute. He further submits that the notification in question does not use the words "only" or "exclusively" made out of jute. As such, the objection of the Revenue that HDPE Tapes have also been used for weaving the fabrics of the bags is not sustainable. He submits that the jute yarn in the said bags is to the tune of Rs. 74% whereas HDPE Tapes is only 26%. The said jute yarn and HDPE Tape has been used in warp and weft in the weaving of fabrics and as the jute predominates in weight, the bags have to be considered as jute bags. Relying on the various judgments of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate also relies heavily upon the decision of the Hon'ble Calcutta High Court in the case of Naffar Chandra Jute Mills Ltd. v. Assistant Collector of Central Excise [1993 (66) E.L.T. 574 (Cal.)] wherein the similar question arose before the Hon'ble High Court. The bags in the said decision were jute bags lined with polythene liner. The interpretation of the Notification 65/87-C.E., the same which is involved in the present case, was before the Hon'ble High Court. The High Court held that the poly lined jute bags would be entitled to the benefit of the notification inasmuch as lining jute bags with poly liner does not take them out of the category of jute bags and they still remain jute bags. It was also observed by the High Court that there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied as jute fabric under 53 Chapter because of the Section Note 2(A) of Section XI of the Central Excise Tariff Act , 1985. The said Section Note will not have any effect while interpreting the exemption notification. He also submits that it is the HDPE Tapes which is giving the essential strength and character to the jute bags in question and as such, the goods should be classified as polyster bags. By referring to the Hon'ble Supreme Court's judgment in the case of Texplus (I) Pvt. Ltd. reported in 1996 (84) E.L.T. 18 (S.C.), he submitted that the benefit of Notification 182/82-C.E. was denied to the appellants by holding that the same would apply only to article made wholly out of commercially known plastic and not to the products having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Hon'ble High Court after relying upon a number of decision of the Hon'ble Supreme Court has held that as the Notification does not use the word made out of "wholly", "only" or "exclusively", the benefit of Notification would be available to the poly-lined jute bag. It has also been observed that there is a catena of judicial precedent holding that the phrase "made of" does not mean "made exclusively of". The High Court has also observed that the express object of the exemption notification is to grant excise duties relief to manufacturers of jute bags or sacks possibly with a view to grant an incentive to manufacturers of jute bags. As such, the restrictive interpretation cannot be given to the notification in question. The distinction so ..... X X X X Extracts X X X X X X X X Extracts X X X X
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