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TMI Blog2003 (2) TMI 416X X X X Extracts X X X X X X X X Extracts X X X X ..... y. The question arose as to whether such processing would be liable to duty under heading 5805 of Central Excise Tariff in view of Note 8 in Chapter 58. That Note reads as under :- In relation to fabrics of this Chapter bleaching, mercerizing, dyeing, printing, water proofing, shrink proofing, tentering, heat-setting, crease resistant, organdie processing or any other process or any one or more of these processes shall amount to manufacture. In appeal No. E-603-R/99-Mum, in the case of M/s. Encee Dyeing Printing Works, Revenue is in appeal against the decision of the Commissioner (Appeals) that embroidery is not fabric and consequently Note 8 which is in relation to fabrics, has no application to embroidery. In appeals E/1145-1146/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Counsel further submitted that it is of significance that Chapter Note 8 in terms states that it is in relation to fabrics of this chapter . According to the Counsel, these words clearly indicate that this Note applies only to fabrics, falling under Chapter 58 and not to other goods of that chapter. According to the learned Counsel the words used in the Note are of particular significance and have been chosen deliberately and this is clear would reveal itself when the expressions in the Note are compared with the expressions used in other tariff Notes like goods of this Chapter , Article of Chapter 71 etc. (Chapter Notes under Chapter 71). The ld. Counsel submitted that if the legislative intention was to cover all goods of Chapter 58 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry can be carried out only on a base and in the present case, the base is fabric. Therefore, it would fall for classification under Heading 5805. The learned DR, therefore, submitted that the Revenue was right in their contention that the goods were correctly classifiable and liable to duty under Tariff Item 5805. The learned DR referred to the decision of the Kerala High Court in the case of Radha s Fancy Piece Goods Merchants v. State of Kerala, Sales Tax Cases (Vol. 48) 1981 361 wherein the Kerala High Court held that embroidered cotton sarees are cotton fabrics falling within entry 7 in the Third Schedule to the Kerala General Sales Tax Act, 1963. 6. It is to be noted at the outset that the issue in dispute in the present appeals is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ics etc. or plainly as cotton fabrics, woollen fabrics. This becomes clear from a perusal of the other related Chapter Headings of the Central Excise Tariff. The Tariff contains separate Headings for various varities of fabrics such as Chapter 54 for Silk Fabrics, Chapter 51 for Woollen Fabrics, and so on. Chapter 58 is for certain fabrics as well as some other items. Thus, the scheme of taxation of fabrics and embroidery under Central Excise Tariff is quite different from the scheme under the Kerala Sales Tax Act. The Central Excise Tariff treats fabric and embroidery separately and as different manufacturing activities. Therefore, the decision of the Hon ble High Court of Kerala in relation to entries in Sales Tax Tariff are not applicabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Braids in the piece; ornamental trimmings in the piece, without embroidery, other than knitted- or crocheted; tassels, pompons and similar articles. 58.10 Quilted textile products in the piece, composed of one or more layers of textile materials assembled with padding by stitching or otherwise other than embroidery of heading No. 58.05. The language of these sub-headings suggest that the items covered under them are not fabrics as commonly understood in the commercial parlance. Note 8 starts with the expression in relation to fabrics in this Chapter . This would seem to indicate that the Note is applicable only to fabrics of the chapter and if any items, which are not fabrics, are covered under the Chapter, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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