Tariff classification of jacquered towels turned on plain wording, with processed yarn not enough to shift the heading.

Jacquered towels made from dyed or bleached yarn, and not subjected to any further process after manufacture, were treated as classifiable under Heading 5802.11 on the plain language of the tariff. The majority said Heading 5802.11 covered cotton fabrics not subjected to any process, while Heading 5802.12 applied only where the fabric itself had been bleached, dyed, printed or otherwise processed; the use of processed yarn did not alter that result. It also found that an earlier High Court ruling on a different notification, and the HSN notes, could not override the tariff text. A dissent would have treated the towels as processed fabric.

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Issues: Whether jacquered towels made out of dyed or bleached yarn and not subjected to any further process after manufacture are classifiable under Heading 5802.11 or Heading 5802.12 of the Central Excise Tariff Act, 1985.

Analysis: The majority held that the dispute had to be resolved on the plain language of the tariff entries. Heading 5802.11 covered cotton fabrics not subjected to any process, while Heading 5802.12 covered cotton fabrics subjected to bleaching, dyeing, printing or any other process. Since the goods were admittedly manufactured out of dyed or bleached yarn and were not subjected to any further process after manufacture, the goods fell within the first entry. The majority further held that the earlier High Court decision, rendered in the context of a different notification, and the HSN notes could not displace the clear tariff language.

Conclusion: The goods were classifiable under Heading 5802.11 and the appeal succeeded.

Dissenting Opinion: The dissenting Member held that the earlier High Court ruling was applicable by analogy and that towels made out of dyed or bleached yarn were to be treated as processed fabric, leading to rejection of the appeal.

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