1994 (4) TMI 128 - AT - Central Excise

CEGAT Rules Scoured Wool as Raw, Not Distinct Commodity

The Appellate Tribunal CEGAT, New Delhi, ruled in favor of Punjab Wool Combers, holding that scoured wool should be classified as raw wool and not as a ... Wool - Scoured wool Issues: Classification of scoured wool under excisable commodity; Limitation period under Section 11A Central Excises and Salt Act.The judgment by the Appellate Tribunal CEGAT, New Delhi, involved two appeals arising from the same impugned order of the Collector (Appeals) regarding the classification of scoured wool as an excisable commodity assessable to duty under Item 68 C.E.T. The Assistant Collector of Central Excise, Ludhiana, had initially classified scoured wool under Item 68 CET and demanded duty from the assessee/appellants, Punjab Wool Combers. Upon appeal, the Collector (Appeals) affirmed the classification but found the demand for duty barred by limitation under Section 11A Central Excises and Salt Act, noting that the show cause notices were issued beyond six months and that the assessee had not suppressed facts. Consequently, Punjab Wool Combers appealed against the Collector (Appeals)' classification decision, while the Collector of Central Excise, Chandigarh, contested the findings on limitation.During the proceedings, Punjab Wool Combers argued that the process of removing greasy matter from wool did not result in any transformation, maintaining that scoured wool retained its original form and was not a product of manufacture, thus not excisable. The Department, on the other hand, contended otherwise. The Tribunal noted that the Department's own understanding indicated that scoured wool fell under the tariff item for raw wool. Referring to a circular from the Central Board of Excise & Customs, the Tribunal highlighted that scoured wool was considered raw wool, as the grease had been removed by washing, and was generally accepted as such, aligning with the classification under Heading 53.01/05(2) of the CCCN. Consequently, the Tribunal accepted Punjab Wool Combers' argument that no new excisable product emerged from the scouring process and allowed their appeal, while rejecting the appeal by the Collector of Central Excise, Chandigarh.In conclusion, the Appellate Tribunal CEGAT, New Delhi, ruled in favor of Punjab Wool Combers, holding that scoured wool should be classified as raw wool and not as a distinct excisable commodity under Item 68 CET. The Tribunal's decision was based on the understanding that scoured wool did not undergo a significant transformation during the scouring process and was akin to raw wool. As a result, Punjab Wool Combers' appeal was allowed, while the appeal by the Collector of Central Excise, Chandigarh, was dismissed.