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TMI Blog2003 (6) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... t conducted by the Deputy Chief Chemist at Mumbai which indicated the goods to be composed of canvass cotton fabric heavily impregnated with paraffin wax, earthy matter and inorganic compounds. The assessee contended in reply that the object of the processing was only to render the fabrics waterproof. The goods are therefore correctly classifiable in Heading 5207.07. It also asked for retest by the Chief Chemist, which showed it to be impregnated with the preparation of waxy material, iron oxide and aluminium sterate and such impregnation is being visible to the naked eye. In its reply, the assessee contended that the object of the impregnation was only to render the fabrics waterproof and it would therefore be more appropriately classifiable in Heading 5207.07. The Assistant Collector did not accept this contention. He found that since the impregnation which is visible by naked eye, the goods are correctly classifiable in Heading 5906.90 and the benefit of exemption contained in Notification No. 48/90 would not be available. This order having been confirmed by the Commissioner (Appeals), the assessee has come before us. 2.The contention of the Counsel for the appellant is this. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assifiable in Heading 59.06. In the Harmonised System of Nomenclature, the presence of such impregnation, coating or covering would perhaps lead to the conclusion that the goods would be classifiable in any of the Headings 59.01 to 59.06. However, the Central Excise tariff with which we are concerned had made a departure. We have following say about this departure. In our decision in Ashish Enterprises v. CCE - 2002 (145) E.L.T. 628 (T) = 2002 (53) RLT 237, we have held in paragraph 5 as follows :- Headings 52.06 and 52.07 of the tariff"5. are for cotton fabrics woven on looms other than the handloom and subject to bleaching, mercerising, dyeing, printing, waterproofing, shrinkproofing, organdieproofing or any two or more of these processes. Heading 52.06 is for fabrics so processed with the aid of power or steam and 52.07 is for fabrics processed without the aid of power or steam. There is no heading in the Harmonized System of Nomenclature corresponding to these headings. Heading 59.06 of the tariff is identically worded as Heading 59.07 of the HSN. Hence, the explanatory notes of Heading 59.07 would apply to Heading 59.06 of the tariff. From a consideration of these provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e question of whether the coating, covering or impregnation can or cannot be seen to the naked eye, it would only arise in the case of fabrics so coated, covered or impregnated. This argument therefore has really significance. On a comparison of the words of the heading, and the notes, it is therefore legitimate to conclude that fabrics which are coated, covered or impregnated other than those which are classifiable in Headings 59.01 to 59.07 and other than those in which the coating, covering or impregnation cannot be seen with naked eye would fall for classification in Heading 59.07. 6.What we have now to consider is the effect, if any, of the words of Headings 52.07 and 52.08. Each of these headings which relates to woven fabrics of cotton containing 85% or more by weight in the case of Heading 52.07 and less then 85% of cotton fabrics mainly or solely with other cannot meet in the case of 52.08 containing sub-headings for fabrics other than denim "subjected to the process of bleaching, mercerising, dyeing, printing, waterproofing, organdie processing or any one or more of these processes." 7.The Tribunal, by its decision in CCE v. Ratan Tarpaulin Water Proof Industries - 2000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich have rendered waterproof by having been coated, covered or impregnated whether being able to be seen or not without the naked eye, that intention could easily have been made manifest. All that was required was to put in words in Headings 59.06 or 59.07 which would say that the heading would not apply to fabrics subjected to the process specified in the sub-heading by coating, covering or impregnating them. The same result could have been achieved by interpreting the index in notes to any of the Chapters 59 or 52. This has not been done. Heading 59.07 covers any fabrics which have been subjected to the process inter alia of waterproofing. It does not exclude a particular process or processes by which this object has been achieved. It is not anybody's case that coating, covering or impregnating a fabric is not a process specified in Headings 52.07 or 52.08. Therefore, on a plain reading of the heading, the fabrics which have been subjected to any process (including coating, covering or impregnation) so as to render them waterproof will fall in Heading 52.07. In fact, as we have noted, even the Explanatory Notes to the HSN seem to suggest that the fabrics which are coated, covere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Harmonised System of Nomenclature. These two headings introduce a specific heading including for fabrics which have been subjected to any of the processes specified therein, among which is waterproofing. By a plain reading of the words of this heading, any fabric which has been subjected to waterproofing by any means whatsoever, irrespective of whether the result of such process is visible to the naked eye or not, would be classifiable in one of them. 11.There is clearly a conflict between these two headings. If the legislative intent, in introducing Headings 52.06 and 52.07, were to exclude therefrom classification of fabrics which would otherwise be classifiable in Heading 59.06, it could have been made clear, either by appropriately amending Note 5 to Chapter 59, introducing a note to Chapter 52 or specifically excluding from heading fabrics of Headings 59.06 and 59.07. None of these has been done. The Board's circular no doubt expresses one point of view, that it is the presence of visible layer that it determined for classification. It however does not answer the question as to why, if that were the intention, none of these steps which comes to account was taken. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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