Functional elastic tapes are not labels where woven brand names are part of the fabric and the exemption fails.

Narrow woven elastic tapes in running length, used to hold garments round the waist, were held not to be "labels" for exemption under Notification No. 27/94-C.E. because the woven brand names formed part of the fabric and were not separate identifying marks. The essential function of a label is to identify or describe the article, whereas these goods retained their primary character as functional elastic tapes. The finding that they were not labels was upheld as factually and legally sound, so the claimed exemption was denied and the Revenue's position prevailed.

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Issues: Whether narrow woven elastic tapes, bearing woven brand names and used for holding garments round the waist, could be treated as "labels" so as to qualify for exemption under Notification No. 27/94-C.E. dated 1-3-1994.

Analysis: The goods were narrow woven elastic tapes in running length, used for holding garments, and the brand names were woven into the fabric rather than affixed or pasted as a separate identifying mark. The essential character of a label is to indicate the article or provide identification, whereas these goods performed a clear functional role in the garment. The reasoning of the Commissioner (Appeals) that the tapes were primarily elastic tapes and not labels was found to be correct, and no legal infirmity or factual inaccuracy was shown in that finding.

Conclusion: The goods were not labels and did not qualify for the claimed exemption; the finding was against the assessee and in favour of the Revenue.

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