Tariff classification of laminated jute bags turned on jute predominance, not an exemption notification, under the excise schedule.

Laminated jute bags were classified as jute manufactures under Item 22A of the First Schedule to the Central Excise and Salt Act, 1944, because the decisive test is whether jute predominates in weight and the goods are not separately specified elsewhere in the Schedule. On the stated facts, the bags satisfied that description. An exemption notification referring to laminated jute bags under Item 68 did not change the statutory tariff classification, since a notification governing exemption cannot alter the true classification. Accordingly, excise duty could not be sustained under Item 68.

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Issues: Whether laminated jute bags manufactured by the petitioner fell under Item 22A of the First Schedule to the Central Excise and Salt Act, 1944, or under Item 68 of the First Schedule.

Analysis: Item 22A covers jute manufactures not elsewhere specified in which jute predominates in weight. The decisive test is whether the goods are jute manufactures, are not separately specified elsewhere in the Schedule, and satisfy the predominance-of-jute requirement. On the facts, laminated jute bags were found to contain jute as a predominant component and to answer that description. The exemption notification describing laminated jute bags as falling under Item 68 did not alter the true statutory classification, because the notification was only concerned with exemption from duty and not with definitive tariff characterization. In view of this classification, further levy of duty under Item 68 was impermissible.

Conclusion: Laminated jute bags were held to fall under Item 22A and not Item 68, and the excise demand based on Item 68 could not stand.

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