1997 (4) TMI 181 - AT - Central Excise

Appellate Tribunal Upholds Collector's Order on Fabric Classification

The Appellate Tribunal CEGAT, New Delhi upheld the Collector's order regarding the classification of bias cut fabrics as electrical tapes under Tariff ... Classification of processed goods - process of manufacture - tariff classification conflict between Heading 19(1)(b) and Heading 68 - continuity of manufacturing process determining liability to dutyClassification of processed goods - process of manufacture - tariff classification conflict between Heading 19(1)(b) and Heading 68 - Whether the bias-cutting and subsequent processing of hand-bleached cotton fabric constituted a process of manufacture of cotton fabrics attracting duty under Heading 19(1)(b), or a process in the manufacture of tapes falling under Heading 68 and therefore not liable to duty under Heading 19(1)(b). - HELD THAT: - The Assistant Collector treated the bias-cutting and other operations as processes of manufacture of cotton fabrics, thereby drawing the goods within Heading 19(1)(b). The Tribunal examined the nature and purpose of the processes: hand-bleached cotton fabric received from outside was bias-cut in a particular manner so as to prepare pieces which were joined, gummed, chemically treated, dried and finally cut and rolled as tapes. The bias-cutting and the subsequent operations were performed specifically to produce the finished commodity (tapes) falling under Heading 68. The Tribunal accepted the respondent's contention that bias-cutting was not a manufacturing process of cotton fabric as such but an intermediate process in the manufacture of tapes. Consequently, the processes must be classified with reference to the commodity ultimately produced, and do not attract a separate levy under Heading 19(1)(b). On that basis the Collector (Appeals) order exempting the goods from duty was held to be correct.The Collector's order was upheld; the operations were held to be processes in the manufacture of tapes under Heading 68 and not processes of manufacture of cotton fabrics attracting duty under Heading 19(1)(b), and the appeal was dismissed.Final Conclusion: Appeal dismissed. The Tribunal held that bias-cutting and the attendant processes were steps in the manufacture of tapes (Heading 68) and not processes of manufacture of cotton fabrics attracting duty under Heading 19(1)(b); Collector (Appeals) order in favour of the respondent is upheld. The Appellate Tribunal CEGAT, New Delhi upheld the Collector's order regarding the classification of bias cut fabrics as electrical tapes under Tariff Item No. 68, not subject to duty under Tariff Item No. 19(1)(b). The appeal by the Revenue was dismissed.