Intermediate woollen fabric duty demand fails where shawls were woven directly from yarn without any separate fabric emerging

Duty could not be demanded on an alleged intermediate woollen fabric where shawls were woven directly from yarn in running length with dividing lines only for cutting, packing and marketing. No evidence showed any separate fabric came into existence at an intermediate stage, and an earlier Tribunal decision on similar facts was applied. On that basis, the demand on the supposed intermediate product was found unsustainable and the appeal was allowed.

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Issues: Whether duty could be demanded on an alleged intermediate woollen fabric arising during the manufacture of shawls woven directly from yarn under Rule 57F(4) procedure.

Analysis: The shawls were woven directly from yarn in running length with dividing lines provided for cutting, packing and marketing. There was no evidence that any separate fabric came into existence at an intermediate stage. The earlier Tribunal decision on similar facts, where no fabric was found to emerge during the intermediate stage, was found applicable.

Conclusion: The demand of duty on the alleged intermediate fabric was not sustainable and the appeal was allowed.

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