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of <h1>Fabric Classification Dispute: Knitted Pile Fabric deemed unprocessed for Duty Exemption</h1> The Tribunal upheld the Commissioner's decision classifying Knitted Pile Fabric as unprocessed under Central Excise Duty. Despite the Revenue's arguments ... Fabric - Knitted pile fabric of man-made textile fabric Issues:Classification of Knitted Pile Fabric as processed or unprocessed under Central Excise Duty.Analysis:1. The appeal was filed by Revenue against the order of the ld. Commissioner (Appeals) regarding the classification of Knitted Pile Fabric manufactured by the appellant. The ld. Commissioner held that the process carried out by the appellant did not amount to manufacture and thus, the fabric was correctly classifiable under heading 6001.12 as unprocessed, attracting Nil rate of duty. The issue was heard with the consent of both parties due to its coverage by previous decisions.2. The respondents were engaged in manufacturing Knitted Fabric of man-made Textile material (Artificial Fur Lining) under Chapter Heading 6001.12.3. Central Excise Officers observed that the fabric was initially declared as dutiable but later declared as unprocessed, attracting Nil rate of duty. A show cause notice was issued to explain why the fabric should not be treated as processed and assessed to duty.4. The assessee contended that the fabric was unprocessed and eligible for exemption from duty under Notification No. 6/2000-C.E. They argued that the process employed did not change the fabric significantly to be classified as processed, citing legal precedents to support their claim.5. The Revenue argued that the process of backcoating, shearing, and electrifying polish undertaken by the respondents constituted processing, as clarified by the Central Board of Excise and Customs. They disagreed with the ld. Commissioner's decision.6. The Revenue further argued that the Tribunal's judgment cited by the ld. Commissioner was based on a different notification and that the present case fell under Notification No. 6/2000, making the fabric processed. They emphasized the need to consider the specific facts of each case.7. The Revenue highlighted that the ld. Commissioner's reliance on legal precedents was misplaced as the facts of the present case differed. They contended that the fabric should be considered processed due to the operations undertaken by the appellant.8. The respondents' counsel cited Tribunal decisions where similar processes were deemed not to result in processed fabrics, maintaining that the fabric remained unprocessed even after shearing and backcoating.9. The respondents' counsel referred to various legal precedents, including decisions of the Apex Court, to support their claim that the fabric should be classified as unprocessed and eligible for the benefit of Notification No. 6/2000.10. The Tribunal, after considering the arguments and case law presented by both parties, upheld the ld. Commissioner's order. Citing legal precedents, the Tribunal found that the fabric did not undergo significant changes to be classified as processed, thus rejecting the Revenue's appeal and upholding the exemption for the fabric from duty.This detailed analysis covers the classification issue of Knitted Pile Fabric under Central Excise Duty, highlighting the arguments presented by both parties and the legal precedents considered by the Tribunal in reaching its decision.
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