Visible waterproofing test governs tarpaulin classification: wax-coated cotton fabric stays under the cotton-fabric entry and gets exemption.

Tarpaulin cloth made from grey cotton fabric, where the wax-based waterproofing left the warp and weft visible to the naked eye, remained classifiable as waterproofed cotton fabric under Chapter 52, Heading 52.06. The product was excluded from Chapter 59, Heading 59.06 because Section Note 5 applies only where impregnation, coating or covering is visibly apparent. On that basis, the cotton-fabric classification prevailed and the consequential exemption benefit followed.

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Issues: Whether tarpaulin cloth / wax-coated waterproof canvas cloth manufactured from grey cotton fabric was classifiable under Chapter 52, Heading 52.06, or under Chapter 59, Heading 59.06 of the Central Excise Tariff Act, 1985, and whether the assessee was entitled to the consequential exemption benefit.

Analysis: Chapter 52, Heading 52.06 covers cotton fabrics subjected, among other processes, to waterproofing. Chapter 59, Heading 59.06 applies to impregnated, coated, covered or laminated textile fabrics, but Section Note 5 excludes fabrics where the impregnation, coating or covering cannot be seen with the naked eye. The manufacturing process showed dipping grey cotton cloth in a wax-based mixture, rolling and drying it, followed by cutting and stitching. The Chief Chemist's report stated that the interstices of the fabric were not completely filled and that the warp and weft yarns remained visible to the naked eye, so the coating or impregnation was not visibly apparent in the statutory sense. On that basis, the product did not fall within Heading 59.06. The view was consistent with the earlier Tribunal ruling treating tarpaulin cloth as a waterproofed cotton fabric under Heading 52.06.

Conclusion: The product was correctly classifiable under Chapter 52, Heading 52.06, and not under Chapter 59, Heading 59.06. The assessee was therefore entitled to the consequential exemption benefit.

Ratio Decidendi: Where cotton fabric is merely waterproofed and any impregnation or coating is not visible to the naked eye, the fabric remains classifiable under the cotton-fabric entry and is excluded from the impregnated/coated textile-fabric entry.

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