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of <h1>Tribunal: Poly Jute Bags Qualify for Exemption</h1> <h3>HOOGHLY MILLS CO. LTD. Versus COLLECTOR OF CENTRAL EXCISE, CALCUTTA-II</h3> HOOGHLY MILLS CO. LTD. Versus COLLECTOR OF CENTRAL EXCISE, CALCUTTA-II - 1999 (114) E.L.T. 75 (Tribunal) Issues:Classification of poly jute fabric and bags under specific headings; Entitlement to exemption under Notification No. 65/87-C.E. for jute bags made with a combination of jute yarn and HDPE Tapes.Analysis:1. The appellant, engaged in manufacturing jute products, classified poly jute fabric as woven fabric of jute-other and poly jute bags as made-up textile articles. The dispute centered on the entitlement to exemption under Notification No. 65/87-C.E. for jute bags made with a combination of jute yarn and HDPE Tapes.2. Both sides agreed on the classification of poly jute fabric and bags. The controversy was whether the appellant's poly jute bags qualified for the concessional rate under the notification. The Revenue argued that the bags were not jute bags due to the use of HDPE Tapes, while the appellant contended that the bags remained jute bags despite the tape's inclusion.3. The appellant's advocate argued that the bags were primarily jute, citing the absence of restrictive language in the notification. Referring to legal precedents, including Supreme Court decisions, the advocate emphasized that the notification's intent was to benefit jute bags made with a combination of materials. A High Court case involving poly-lined jute bags supported the appellant's position.4. The Revenue countered, asserting that the bags should be classified as polyester due to the essential role of HDPE Tapes. Reference was made to a Supreme Court judgment denying benefits based on material composition. The Revenue urged rejection of the appeal based on these arguments.5. The Tribunal analyzed the dispute, noting the fabric's classification as jute and the undisputed classification of the bags. The Tribunal rejected the Revenue's argument based on the Section Note and upheld the appellant's position. Citing the High Court precedent and legal principles, the Tribunal concluded that the bags qualified as jute bags under the notification. The Tribunal found the High Court's reasoning applicable and allowed the appeal, setting aside the previous order.
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