Classification of woollen felts as processed fabrics failed where the unit was not a composite mill and no weaving was done.

Woollen felts manufactured by the assessee were held not to be correctly treated as processed fabrics, other, because the factory did not carry on spinning or weaving and could not be regarded as a composite mill. The felt was also not a woven product, so the lower authorities' basis for classifying it as woollen fabric and denying tariff-value adoption failed. On that footing, the claimed classification and notification benefit remained available to the assessee.

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Issues: Whether woollen felts manufactured by the assessee were classifiable as processed fabrics, other, or as processed fabrics falling under Sr. No. (1) of the relevant tariff table, and whether the assessee was entitled to adoption of tariff value under the applicable notification.

Analysis: The assessing and appellate authorities had proceeded on the basis that the factory was a composite mill and that the goods were processed fabrics, other, with tariff values available only to a factory other than a composite mill. On the record, however, spinning and weaving were not carried out in the factory, so the unit could not be treated as a composite mill. The woollen felt in question was also not a woven product, and therefore did not fall within the category of woollen fabrics as applied by the lower authorities. In these circumstances, the basis for denying the claimed classification and the tariff value benefit did not survive.

Conclusion: The woollen felts were not correctly assessable as processed fabrics, other, on the footing adopted by the lower authorities, and the assessee was entitled to the relief claimed under the notifications.

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