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TMI Blog2018 (6) TMI 371X X X X Extracts X X X X X X X X Extracts X X X X ..... has expired on 20.01.2016 due to natural cause and they enclosed the death certificate of the Mrs. Nayana J Shah. Similarly, proprietor of M/s Arya Textile and M/s Chaitali Textile, Mr. Bhupendra Shah was also expired on 09.05.2012, in support of his contention, death certificate is enclosed with the miscellaneous applications. Since the proprietors of M/s Jet Age, M/s Arya Textile & M/s Chaitali Textile have expired, the appeals against these firms are abated under Rule 22 of the CESTAT (Procedure) Rules, 1982. 3. Learned AR pointed out that with effect from 01.4.2003, textile fabrics were brought under CENVAT scheme. Considering the manufacturing practices of the textile sector involving subcontracting of large number of manufacturing processes, special rules viz. Rule 12B of Central Excise, 2002, and also Rule 2(h), a proviso to Rule 4 of CENVAT Credit Rules, 2002, were introduced. With these new rules a person who did not have a factory but who was only getting goods manufactured from job workers also could claim CENVAT Credit if the goods to be manufactured were falling under Chapters 50, 51, 52, 53, 54, 58 or 60 of Central Excise Tariff Act, 1985. It is relevant that these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Circular relates to cotton grey fabrics, cotton belting duck fabrics and it does not relate to bolting cloth. He relied on the grounds of appeal. In the grounds of appeal it has been argued that term 'bolting cloth' includes in itself a work 'cloth', which synonym of word 'fabric'. It has been argued that the cloth is sold after cutting across the length. It has been argued that the heading description of CHS 59.11 refer to "Textile Products and articles, for technical uses, specified in note 7 to this chapter' and includes bolting cloth at sub-heading No. 5911.20. Note 7 (a) to Chapter 59 applies to Textile products in the piece, cut to length, or simply cut to rectangular (including square) shape for the types of goods specified at Note 7 (a)(i) to 7 (a)(vi) and includes at Sr. No. (ii) the bolting cloth. The length of the 'cut piece', whether one meter or ten meters or 'n' meters has no relevance in as much as it represents a 'cut piece' or 'fabric cut to length' and hence qualifies for Note 7 to Chapter 59. 3.3 It was argued that the assessee has not stated anywhere that they were selling the said piece after cutting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -cause notice due to lack of old records and activities. It has also been argued that 5 firms registered under Excise operated from the same premises at Mumbai and Bilmoria in Gujarat. It has been argued that under Notification No. 8/2003, all tests are prescribed which reads as follows: - "(i) Aggregate value of clearances of all excisable goods by a manufacturer from one or more factories, or (ii) Aggregate value of clearances of all excisable goods from a factory by one or more manufacturers. " 3.6 It has been argued that BBCPL and other 4 registered firms engaged the remaining firms as their job workers solely for the purpose of avoiding duty. Another ground raised relates to admissibility of CENVAT Credit, which the impugned order hold that it would be admissible if the goods are held to be classifiable under heading 59.11. 4. Learned Counsel for the respondent relies on the impugned order. 5. We have gone through rival submissions. We find that the primary issue in this context is if the goods manufactured by the appellant would be classifiable under heading 59.11 as bolting cloth or not. The other issue would arise only if the classification of the goods is held to 59.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hape length or to Textile articles. In the instant case, it is not disputed that the goods manufactured are in running length and thus, prima facie the same would not fall under the heading 59.11. The argument of the Revenue is that the heading 59.11 does not specify the length of the fabrics and therefore, even in running length the product would be classifiable under heading 59,11 and alternative argument is that when the goods are sold, they sold after cutting from running length and thus, would be classifiable under heading 59.11 as bolting cloths. 5.1 The Revenue has relied on the clarification of Textile Committee, wherein Textile Committee has clarified that the samples under consideration are "bolting cloth"; that the samples can be used as screen printing; that the laboratory does not have the information for other application of fabrics. The similar opinion was given by the Chemical Examiner of Customs House Laboratory also. Revenue has argued that if the fabric contains necessary features to be capable of being used as bolting cloth would be classifiable as bolting cloth. Revenue has relied on CBE&C order under 37D of Central Excise Act, 1944 issued under F. No. 48/2/97 ..... 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. Paragraph (a) of CN-6 deals with "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 numbers 59. 07 and 59.08) From this, read with SN-5 and 6, we may infer that the context of TH 59.09 requires that it apply to 'made up' goods. Running lengths of unprocessed textiles or non-made up goods therefore would not be covered by this paragraph."
The Hon'ble Apex Court has clearly held that running length of unprocessed goods would not be covered under Chapter 59. There is no dispute that the goods are cleared inn running length and not in cut pieces. Since the issue of classification is clearly covered in the favour of respondents, we hold that the goods would not be classifiable under heading 59.11. On this count, the Revenue's appeal is dismissed.
5.3 The other issue relating to clubbing and availability of CENVAT Credit in view of classification under heading 59.11 do not affect the outcome of demand.
6. In these circumstances, we dismiss the appeal.
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