Tariff classification of carpets turns on whether Section XI Note 2(B)(ii) applies to the product's physical composition.

Classification of carpets depended on whether the goods satisfied Note 2(B)(ii) of Section XI, which required a ground fabric with a pile or looped surface. The Tribunal found that this essential factual condition was not established on the record, so the note could not be invoked to shift the goods to sub-heading 5703.90. The appellate order was therefore upheld and classification under sub-heading 5703.20 sustained, with the Revenue's challenge failing.

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Issues: Whether the goods manufactured by the respondent were correctly classifiable under sub-heading 5703.90 or under sub-heading 5703.20, and whether Note 2(B)(ii) of Section XI applied to the product.

Analysis: The dispute turned on the physical composition of the carpets and whether they consisted of a ground fabric with a pile or looped surface. The Tribunal found that the essential condition for invoking Note 2(B)(ii) of Section XI was not satisfied on the facts, and therefore the note could not be applied to shift the classification to sub-heading 5703.90. The appellate order was found to be correct on the classification issue.

Conclusion: The goods were not shown to fall within Note 2(B)(ii) of Section XI, and the classification under sub-heading 5703.20 was upheld. The Revenue's challenge failed.

Ratio Decidendi: Where the essential factual condition for applying a tariff note is not established, the note cannot be used to alter the classification of the goods.

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