Classification of laminated knitted fabrics under a specific tariff entry excludes the residuary heading; limitation also sustained.

Laminated fabrics on a base of man-made knitted fabrics were treated as textile fabrics impregnated, coated, covered or laminated with plastics under Heading 59.03. The expression "man-made textile material" was held wide enough to include man-made knitted fabrics, while Chapter 60 excluded laminated fabrics falling within Chapter 59. On that basis, the specific sub-heading 5903.29 applied and the residuary 5903.99 could not be used. The demand was also found to be within the normal limitation period, as a proper show cause notice had been issued and the goods' description and classification had been suppressed.

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Issues: (i) Whether laminated fabrics on a base of man-made knitted fabrics were correctly classifiable under sub-heading 5903.29 of the Central Excise Tariff Act, 1985 or under the residuary sub-heading 5903.99; (ii) whether the demand was barred by limitation.

Issue (i): Whether laminated fabrics on a base of man-made knitted fabrics were correctly classifiable under sub-heading 5903.29 of the Central Excise Tariff Act, 1985 or under the residuary sub-heading 5903.99.

Analysis: The goods were admittedly textile fabrics impregnated, coated, covered or laminated with plastics falling under Heading 59.03. The tariff scheme differentiated sub-headings by the nature of the base fabric, and the expression "man-made textile material" was held wide enough to include man-made knitted fabrics. Chapter 60, which covered knitted or crocheted fabrics, expressly excluded laminated fabrics of Chapter 59 by Note 1(c). The residuary sub-heading 5903.99 could apply only where the goods were not covered by the specific entry.

Conclusion: The fabrics were correctly classifiable under sub-heading 5903.29 and not under sub-heading 5903.99, against the assessee.

Issue (ii): Whether the demand was barred by limitation.

Analysis: The demand was found to have been raised within the normal period of limitation. A proper show cause notice had been issued, and the assessee had suppressed the exact description and classification of the goods. The classification was decided after observing the principles of natural justice.

Conclusion: The demand was not barred by limitation, against the assessee.

Final Conclusion: The classification adopted by the lower appellate authority was sustained and the challenge on limitation also failed, so the appeal did not succeed.

Ratio Decidendi: Where laminated textile fabrics are admittedly covered by Heading 59.03, the expression "man-made textile material" includes man-made knitted fabrics, and a residuary tariff entry cannot be invoked when a specific classification applies.

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