Slab-rate valuation for fents and rags depends on the parent cotton fabrics, while duty is computed on the goods themselves.

For slab-rate classification under Notification No. 252/82-C.E. for fents and rags arising out of cotton fabrics, the value of the parent cotton fabrics determines the applicable duty slab because the notification links the rate to the originating fabrics. Once that slab is fixed, the duty remains ad valorem and is computed on the value of the fents and rags themselves. The notification was treated as clear and not open to a different construction, so the Revenue's interpretation on slab determination was accepted.

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Issues: Whether, for the purpose of determining the slab rate under Notification No. 252/82-C.E. dated 08-11-1982 in respect of fents and rags arising out of cotton fabrics, the relevant value is the value of the parent cotton fabrics or the value of the fents and rags themselves, and whether the actual ad valorem duty is to be computed on the value of the fents and rags.

Analysis: The notification uses the expression "fents and rags arising out of cotton fabrics" and refers to "such cotton fabrics", which makes the value of the originating fabric the relevant factor for deciding the applicable duty slab. Once the slab is fixed, the actual duty remains ad valorem and is calculated on the value of the fents and rags themselves. The language of the notification was treated as clear, leaving no room for an alternative interpretation.

Conclusion: The value of the cotton fabrics from which the fents and rags arise must be taken into account for determining the applicable rate of duty, while the actual duty payable is to be computed on the value of the fents and rags themselves.

Final Conclusion: The departmental appeal succeeded and the appeal by the assessee failed, with the legal position under the notification clarified in favour of the Revenue on slab determination.

Ratio Decidendi: Where an exemption or tariff notification fixes ad valorem slab rates by reference to goods arising out of other goods, the expression identifying the originating goods governs the slab-rate valuation, while the actual duty is computed on the value of the excisable goods assessed.

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