Tariff classification of knitted pile fabric in running length depends on its condition at removal, not later conversion into towels.

Grey knitted pile fabric cleared in running length, even with indentations for later cutting into towels, remained classifiable as knitted pile fabric under heading 60.01 rather than as made up textile articles under heading 6307.90. Classification turned on the condition of the goods at the stage they emerged from the manufacturer and processor, and later cutting, folding, stitching and hemming by job workers did not change that tariff character. Prior decisions on the same product supported this view, while contrary rulings cited by the Revenue concerned different goods and were not applicable.

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Issues: Whether grey knitted pile fabric and processed knitted pile fabric in running length, having indentations along which they could later be cut into towels, were classifiable as made up textile articles under heading 6307.90 or as knitted pile fabrics under heading 60.01.

Analysis: The decisive question was the tariff character of the goods at the stage when they emerged from the factory of the manufacturer and the processor. The fabrics were cleared in running length, and the later conversion into towels occurred only after further cutting, folding, stitching and hemming by job workers. The earlier decision on the same product and on the same issue had held that knitted pile fabrics in running length remain classifiable under heading 60.01 and do not become made up articles merely because they contain indentations for eventual conversion. The contrary decisions cited by the Revenue dealt with different goods and a different tariff dispute and were therefore not applicable.

Conclusion: The goods were not classifiable under heading 6307.90 as made up textile articles and were correctly classifiable under heading 60.01 as knitted pile fabrics. The Revenue's appeals therefore failed.

Ratio Decidendi: Fabric in running length does not become a made up textile article merely because it is designed to be later cut and converted into finished articles; classification depends on its condition at the relevant stage of manufacture.

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