Pile fabric classification and exemption turned on base fabric treatment and whether tumbling dry amounted to manufacture.

Woollen pile knitted fabric was treated as a pile fabric with a cotton base and woollen pile, and Section Note 14 of Section XI was applied to uphold classification under Tariff Heading 6001.19 rather than Heading 52.05. The tumbling dry process was held not to create a new commodity and, even when carried out with power, did not amount to manufacture. On that basis, the product remained eligible for Notification No. 109/86-C.E., and the duty demand could not survive.

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Issues: Whether the woollen pile knitted fabric was classifiable under Tariff Heading 6001.19 or under Tariff Heading 52.05, and whether the tumbling dry process amounted to manufacture so as to deny the benefit of Notification No. 109/86-C.E.

Analysis: The fabric was treated as a pile fabric with a cotton base and a woollen pile. In the circumstances, Section Note 14 of Section XI was applied and the presence of the base fabric was accepted. The classification under Tariff Heading 6001.19 was therefore upheld on the footing that the fabric remained a pile fabric notwithstanding the cotton content.

The tumbling dry process was found not to bring into existence any new commodity. Drying of the fabric, even with the aid of power, was held not to constitute manufacture. As the fabric as a whole contained predominating cotton fibre, the benefit of Notification No. 109/86-C.E. was held applicable.

Conclusion: The classification under Tariff Heading 6001.19 was sustained, but the product was held entitled to exemption under Notification No. 109/86-C.E. because tumbling dry was not manufacture and the demand of duty could not survive.

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