Made up textile classification turns on ready-to-use chaddars separated by cutting at marked lines, with limitation sent back

Textile goods woven with regular demarcations and intended to be separated by cutting at marked lines, without further sewing or working, fall within the tariff concept of made up articles under Section Note 5 of Section XI and were treated as classifiable under sub-heading 6301.00. On limitation, the record noted that the goods were described as fabrics in the classification list, no separate price list was filed for the specific variety, and no distinct findings were recorded for that variety; the limitation question therefore required fresh consideration by the adjudicating authority after hearing the assessee and passing a speaking order.

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Issues: (i) Whether the Jagat Guru variety of chaddar was a made up textile article classifiable under sub-heading 6301.00 of the Central Excise Tariff. (ii) Whether the extended period of limitation was sustainable on the facts of the case.

Issue (i): Whether the Jagat Guru variety of chaddar was a made up textile article classifiable under sub-heading 6301.00 of the Central Excise Tariff.

Analysis: The goods were woven with demarcations at regular intervals, stamped and sold as chaddars, and were intended to be separated by cutting at the marked lines. After separation, no further sewing or other working was required for use. Section Note 5 of Section XI of the Central Excise Tariff treats as made up articles goods produced in the finished state, ready for use, or merely needing separation by cutting dividing threads, and also articles cut from fabric having bands of unwoven threads at regular intervals. On that basis, the marked chaddars fell within the tariff concept of made up textile articles.

Conclusion: The classification was held to be under sub-heading 6301.00, in favour of Revenue.

Issue (ii): Whether the extended period of limitation was sustainable on the facts of the case.

Analysis: The classification list described the goods as fabrics and no price list was filed for the Jagat Guru variety. The adjudicating authority had not recorded separate findings specific to that variety on limitation. In view of these features, the matter on limitation required reconsideration by the jurisdictional adjudicating authority after giving the assessee an opportunity to defend the case and after passing a speaking order in accordance with law.

Conclusion: The limitation issue was remanded for fresh consideration.

Final Conclusion: The substantive classification dispute was decided against the assessee, while the limitation question was sent back for reconsideration by the adjudicating authority.

Ratio Decidendi: Textile goods that are ready for use upon simple separation at marked dividing threads, without any further sewing or working, are made up articles for tariff classification purposes.

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