Ready-to-wear apparel classification controls excise exemption for raincoats, while caps remain disputed as headgear.

Raincoats and caps were examined for classification under the Central Excise Tariff, with the majority treating the goods as ready-to-wear apparel or ready-made garments because they were cut, tailored and stitched, sold in standard sizes, and understood in ordinary trade usage as outer coverings. On that basis, Item 22D applied, the residuary Item 68 was rejected, and exemption under the relevant notifications followed, with refund relief allowed subject to limitation. The concurring and dissenting view agreed for raincoats but held caps were not commercially known as ready-made garments and were better treated as headgear, so relief was confined to raincoats.

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Issues: Whether raincoats and caps manufactured by the assessee were classifiable as articles of ready-to-wear apparel or ready-made garments under Tariff Item 22D of the Central Excise Tariff and therefore exempt from duty under the applicable exemption notifications, or whether they fell under the residuary Tariff Item 68.

Analysis: The majority held that the goods were cut, tailored and stitched like garments, were sold in standard sizes, and functioned as outer covering. The expression "ready-to-wear" was understood in its ordinary meaning, supported by dictionary usage, and the Customs Cooperation Council Nomenclature was treated as corroborative of trade usage. The majority also accepted the explanation for non-obtaining of a licence, noting that the relevant notifications under Rule 174-A exempted specified ready-made garments from licensing requirements. On that basis, the earlier classification under Item 68 was rejected.

Conclusion: The goods were held to be ready-to-wear apparel covered by Item 22D and exempt under the relevant notifications, with consequential refund relief allowed, subject to limitation.

Concurring / Dissenting Opinion: Shri G. Sankaran agreed that raincoats fell within Item 22D and were exempt, but held that caps were not commercially known as ready-made garments and were more appropriately classifiable as headgear. On that view, the appeal was allowed only for raincoats and rejected for caps.

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