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TMI Blog1985 (3) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, counterpanes, table-cloths, embroidery in the piece, in strips or in motifs and fabrics impregnated, coated or laminated with preparations of cellulose derivatives or of other artificial plastic materials but does not include any such fabrics if it contains- (i) 40 per cent or more by weight of wool; (ii) 40 per cent or more by weight of silk; (iii) 60 per cent or more by weight of rayon or artificial silk; or (iv) 50 per cent or more by weight of jute (including Bimlipatam jute or mesta fibre); Provided that in the case of Embroidery in the piece, in strips or in motifs and fabrics impregnated, coated or laminated with preparations of cellulose derivatives or of other artificial plastic materials the percentages referred to in (i) to (iv) above shall be in relation to the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin which all the nine manufacturer appellants had their power-looms). They seized 13979.75 metres of fabrics from Messrs Ball Textiles on the ground that they were furnishing fabrics . They also seized 111 metres of furnishing fabrics from 16 looms of the nine manufacturer appellants. On 23-2-1974 and subsequently statements were recorded from a number of persons, including the appellants, the dealers to whom Messrs Bali Textiles were selling the fabrics and certain cloth merchants. On the basis of samples drawn, reports were also obtained from the Deputy Chief Chemist, New Custom House, Bombay; the Office of the Textile Commissioner; and the Victoria Jubilee Technical Institute (VJTI), Bombay. On the basis of these enquiries, a show-cause notice dated 30-7-1974 was issued to all 10 appellants: In the case of the nine manufacturer/appellants the ground was that though they had been granted permission to work their power-looms under the special procedure (under Rule 96J) and to produce and clear cotton fabrics falling under Item 19I(2) of the Central Excise Tariff, they had instead cleared cotton fabrics known as furnishing fabrics falling under Item 191(1), on which duty was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng cut to the required sizes to suit the needs of each customer. He further submitted that the absence of a severable light separation of single warps at the end of every piece of chaddar, which the Department had contended was necessary, led to wastage of material and it was on this account that the fabrics under seizure did not have such a separation. He added that the method adopted was in line with the recommendations of the National Productivity Council. The terms used by the wholesale dealers to describe the goods, namely Jacquard cloth or tapestry powerloom cloth should not be held against them as manufacturers, since a wholesaler might describe his wares according to his convenience. 8. Shri Pitre also assailed the reports of the three technical authorities referred to above on the ground that they were inconclusive and had not been able to withstand cross examination. He further submitted that the appellants had produced several witnesses in support of their stand, but the evidence of these witnesses had been conveniently ignored by the Collector. 9. Shri Pitre also submitted that the demands for duty as contained in the Collector s order were bad, since the amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to specific sizes and confining designs, which the fabrics in question were not; chaddars necessarily had borders on all the four sides, which the seized fabrics did not have; the fabrics under seizure were in running lengths of several tens of metres and had only five selvedges. Chaddars were not taken in running length, and if they were so taken for the purpose of continuous weaving, there was always a severable light separation of single warps (no weft being used) at the end of every piece of chaddar; the bills for chaddars, etc., would according to trade practice indicate only the number of pieces whereas in respect of the fabrics under seizure, the bills (though printed for chaddars, bed-sheets, etc. in standard sizes) had been overscored with the subscription dobby cloth ; quantity was shown in terms of length in metres, and the price also charged on the basis of metres. 14. As regards the argument of the appellants that the pieces had been woven in continuous lengths to avoid wastage, Shri Verma submitted that this argument did not have force because the appellants were also simultaneously weaving chaddars in separate pieces. 15. Shri Verma also submitted that the te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r they might be called, would fall within sub-item I of this Item. Therefore, the question arises under which entry under sub-heading I they would fall. Here again, it is common ground that entry (1-A) is not attracted and that the choice is between entry (1) and entry (2). 20. As will be seen from the entries, which have been reproduced in para 2 above, entry (1) is specific and covers a number of varieties of cotton fabric which have been described thereunder. Entry (2) is a residuary entry, and covers all other cotton fabrics [apart from those falling under entry (1-A)], As between entries (1) and (2), entry (1) carries a higher duty liability-firstly, because the statutory rates of duty on some goods falling under entry (2) are lower; and secondly, because goods falling under entry (1) are excluded from the benefit of assessment at the compounded levy rate vide para 3 above). Therefore, when the question is whether any goods would fall within entry (1) which carries a higher duty liability, or entry (2) which carries a lower duty liability, the burden is clearly on the Excise authorities to bring the goods within the scope of entry (1), in accordance with well-known authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere tapestry . 23. Therefore, in these proceedings what was at issue was whether the goods were furnishing fabrics , and the burden was on the Excise authorities to establish that they were so. No doubt, the appellants took the stand that the goods were chaddars but the basis of their case had to be that the goods were not furnishing fabrics. Whether they were chaddars in standard sizes or fabrics which were meant to be cut to length and used as chaddars (assuming that their explanation to this effect is to be accepted) would make no difference to their defence. 23A. Having set out the basic issue in the case, we shall proceed to examine the evidence on which the Collector s conclusions were based. These can be classified as under :- (i) The popular, or layman s, conception of chaddars and furnishing fabrics ; (ii) the opinion of technical persons such as the Deputy Chief Chemist; (iii) Evidence given or submitted before the Collector; and (iv) Evidence from the accounts of the wholesalers who actually dealt with the goods. 24. Coming to the first aspect, Shri Verma had referred to the criteria which according to the Department would show that the fabric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l usage may be ascertained before assessment. It appears that the Chemical Examiner or Deputy Chief Chemist was not examined before the Collector. His report as it is of little help, since he has left the matter to be determined on the basis of market enquiries and actual usage. 29. The opinion of Shri R. Subramanian, Deputy Director in the Textile Commissioner s Office was as under :- I am to convey the technical opinion that samples marked `A and B can be used for purposes of furnishing materials and cloth as per samples No. C and D can be used as dress materials . According to the Collector, the advocate for the appellants had requested cross-examination of Shri Subramanian, and the request was accepted. However, there is no further reference in the order to his cross-examination or what transpired therein. Going by the report itself, we have found a difficulty, because we were unable to correlate the samples produced before us by the Department With A , B , etc., referred to in the report. Taken by itself, the report is on a fifty-fifty basis : two of the samples are said to be usable as furnishing materials and the other two are said to be usable as dr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh tested yarn in furnishing fabrics . We find that what Prof. Ajgaonkar stated during cross examination considerably dilutes what was said in the report of the VJTI. In fact, if it was his view that in the broad sense all the fabrics of which samples were sent to him could be called furnishing fabrics, this would appear to be somewhat contrary to the opinion given in the report regarding samples No. 1 and 4. 31. Thus, considering the technical reports as a whole, and taking into account the cross examination of the only one of the technical persons of which there is a record, we are unable to find that they support the categorical conclusion that the goods were furnishing fabrics. 32. We then come to the examination of witnesses before the Collector, as well as evidence in the form of letters, etc., submitted to him. It appears that apart from Prof. Ajgaookar of the VJTI, and Shri Subramanian of the Textile Commissioner s Office (to both of whom reference has already been made), the examination covered the following persons on whose evidence the Department had placed reliance :- 1. Shri O.J.F. Gomes, Assistant Collector Central Excise, who was the investigating office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urnishing, otherwise dresses could be made. The normal width of furnishing cloth was 48 whereas for bed-sheets it was 54 . 37. Of the defence witnesses, Shri Ranga Yadao, Shri T.S. Joshi and N.R. Raut all stated that the cloth under seizure was not furnishing fabrics. The two independent gentlemen expressed the opinion that the fabrics were not furnishing fabrics, that they were using the same as chaddars and that they had not seen anybody using them as furnishing fabrics. 38. The above is the state of the evidence, as seen from the Collector s order. The Collector relied on the evidence of the witnesses called by the Department in support of the conclusion that the goods were furnishing fabrics. He rejected the evidence of the defence witnesses on various grounds. The evidence of Shri N.R. Raut was rejected on the ground that he had placed emphasis more on the production side, that is by using single beam and producing cloth of continuous length. The evidence of the two independent gentlemen was rejected on the ground that it was not supported by any documentary evidence. The three letters from representative Chambers of Commerce and 48 letters from various dealers in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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