1990 (10) TMI 172

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....sleevings manufactured out of fibre glass yarn by braiding process - whether under Tariff Item 22B of the erstwhile C.E.T. as contended by the Department or 22F as contended by the appellant. 2. The process of manufacture is as follows :- Raw fibre glass sleeves are cut into lengths exceeding one metre & dipped in varnish. These are dried in an electric oven & after curing, the ends are cut & reduced to one metre length or lengths as desired by the customers. According to the appellants, the goods were classifiable under T.I. 22F of the erstwhile CET as "mineral fibres & yarns & manufactures therefrom" and exempt from duty by virtue of Notification No. 87/76 dated 16-3-1976. The Department classified the goods under T.I. 22B as "texti....

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....riod from 8-1-1981 to 29-4-1982. The appellants were under a bona fide belief that their products would fall under T.I. 22F & were covered by Notification 87/76 which does not distinguish between varnished & unvarnished sleevings. There was divergent views on the classification of the goods & there has been lot of correspondence on the subject between the appellants & the Department. The appellants also sought to rely upon a Trade Notice issued by the Bombay Collectorate clarifying that fibre glass sleevings were eligible to exemption under the above mentioned notification. 4. We see great force in these submissions. The manufacture of varnished fibre glass sleevings was within the knowledge of the Department right from December 1981 whe....

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....d that there was no suppression or misdeclaration of facts on the part of the appellants so as to justify the invoking of the extended period of limitation, & the demand is therefore time-barred. Accordingly, we set aside the impugned order in E/A 1224/85 & allow the appeal with consequential relief. 5. Regarding the issue of classification, the appellants contend that the item is classifiable under T.I. 22F and covered by Notification 87/76 while the Department's contention is that the correct heading is T.1.22B, Let us examine the rival entries. Tariff item 22F reads as follows :- Item No. Tariff Des.c.ription Rate of Duty (1) (2) (3)  22F Mineral fibres and yarn, and manufactures thereform, in or in relati....

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....LE. They do not burn and can be subjected to temperatures as high as 1200°F. before they show signs of deterioration. 2. NON-ABSORBENT. Being glass, they do not absorb moisture. They also do not absorb dirt. This makes it possible to wash glass fabrics easily and to dry them damp in as little as seven minutes. They require no ironing. 3. IMPERVIOUS. They are mothproof, mildew-proof, and will not deteriorate in sunlight or with age. They resist most chemicals. Being impervious to water, glass fabrics will not shrink when washed. 4. STRONG. Fibres made of glass are among the strongest produced by man-made means. Owing to their tensile strength they are stable in fabric; in addition, when used as reinforcement in plastics they ser....

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....xtile fibre & hence textile fabrics made of glass fibre came under the generic name of "man-made fabrics". However, it was held that T.I. 22B is a residuary item & therefore 22F would be more appropriate & the classification under 22B was set aside & the matter remanded for pre-dominance test. As far the decisions of the Hon'ble Madras High Court as Standard Batteries v. Appraiser (1981 E.L.T. 257) and the Hon'ble Gujarat High Court in Dynamo Dielectrics, the pre-dominance test was not considered. In the case CCE Bombay v. Bharat Shoe Lace Works (1987 (27) E.L.T. 545) the Tribunal while classifying braided fibre glass sleevings under T.I. 22F, did not dis.c.uss T.I. 22B and did not go into the question of pre-dominance of mineral fibre or y....