Excise classification of composite fabrics depends on cotton content in the final product, leading to refund of duty paid.

For excise classification of composite fabrics, the percentage of cotton had to be assessed by reference to the final manufactured product, not merely the base fabric. On the analyst's reports, the cotton content in the end product was well below the 40% threshold, so the coated fabrics could not be treated as cotton fabrics under Tariff Item No. 19(III). The earlier classification therefore could not stand, and the duty collected on that basis was refundable to the assessee.

---

---

Issues: Whether the petitioner's coated fabrics were liable to classification as cotton fabrics under Tariff Item No. 19(III) by reckoning cotton content with reference to the ultimate product, and whether the duty collected under that classification was refundable.

Analysis: The dispute turned on the correct basis for determining the predominance of cotton in the goods manufactured. The Court applied the principle that the percentage of cotton must be assessed with reference to the ultimate product and not merely the base fabric. On the materials produced, the analyst's reports showed that the cotton content in the end product was far below 40% by weight. Once that position was accepted, the goods could not answer the description of cotton fabrics under Tariff Item No. 19(III), and the classification approved earlier could not stand.

Conclusion: The classification of the goods under Tariff Item No. 19(III) was invalid, and the goods were not liable to be treated as cotton fabrics for excise duty purposes. The assessee was entitled to refund of the duty paid under that classification.

Ratio Decidendi: For excise classification of composite fabrics, the relevant percentage of the constituent material must be determined with reference to the final manufactured product, and where the constituent falls below the tariff threshold in the end product, the goods cannot be classified under that tariff item.

---