TaxTMI 
TaxTMI 
1993 (10) TMI 201
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the clearance of semi-finished goods i.e. floor coverings of felt falling under sub-heading 5702.20 and 5702.90 CET from their factory for the purpose of latexing at the factory premises of M/s. A.V. Laminates at Faridabad, under Rule 56B of the Central Excise Rules. According to department on scrutiny, it was found that the item being cleared by the party was not floor coverings of felt as such but was in fact `felt' itself. After considering the reply and on hearing the party, it was held by the Collector in the impugned order that the so-called semi-finished floor coverings felt manufactured and cleared by the party for latexing was felt falling under sub-heading 5602.90 and, accordingly, he confirmed the demand made in the show cause n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....se fabrics is sent for latexing on the underneath of base fabric. But the Collector had held that these goods are `felts' as per the Chapter Note 2 of the Chapter 56 and are not semi-finished floor coverings on the ground that the term felt as per the said note includes needle loom felt and fabric consisting of a web textile fibres the cohesion of which has been enhanced by stitch bonding process using fibres from the web itself. He said that felt as such has not been defined in Chapter 56, and, accordingly, H.S.N. explanatory notes are the guidelines in determining classification of the goods. He referred to the H.S.N. notes, wherein it was stated that "Felt is usually obtained by superimposing, one on the other, a number of layers of text....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... felt used for making carmattings instead of manufacturing process of floor coverings of felt meant for domestic use while arriving at the conclusion that the item is a `felt'. The latexing is the last process in the entire process of manufacture of floor coverings. The latexing is done to provide strength and fineness to the floor coverings. Even without the latexing, the fibres needled to the fabrics in roll form have attained the essential characteristics of floor coverings and accordingly the pre-latexed floor coverings cleared under Section 56B to outside for latexing are semi-finished goods. These goods are not bought and sold as felt and no evidence was brought on record by the department to prove that it is known as felt in the comm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....onths is not sustainable. He said that notwithstanding the above issues, the Collector has not taken the correct value for determining the quantum of duty. He has taken the value of latex floor coverings (finished floor coverings) while department wanted to levy the duty on the semi-finished goods as `felt' at that stage. He requested to set aside the penalty as there was no intention to evade payment of duty. 5. While countering the arguments Smt. J.M.S. Sundaram, learned SDR submitted that it is not the case of the department to treat the item in question as stitch bonded fabrics to classify the item as `felt' but nevertheless it is felt as felt includes needle loom felt. It is needle loom felt since it is made by needling such fi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....unch on the needle loom. They are neither carpets/floor coverings nor semi-finished goods of floor coverings but `felt' as described in the Tariff Entry 56.02. She referred to the put note in the opinion given by the Bombay Textile Research Association wherein it was mentioned that "The information contained in this letter and/or enclosed Report is/are purely meant for your guidance and should not be used for litigation/evidence/advertisement". She said that opinion and letters given by the experts are not relevant to decide the issue in this case and there was no necessity for the department to go into commercial parlance since the nature and description of the product manufactured by the appellants is same as that of item specified in the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....5602.90 Other." Accordingly, felt whether or not coated or laminated falls under Tariff Entry 56.02. As per Note 2 of Chapter 56 of the Central Excise Tariff, felt has been defined that "the term `felt' includes needleloom felt and fabrics consisting of a web of textile fibres the cohesion of which has been enhanced by a stitch-bonding process using fibres from the web itself. In the letter dated 21-1-1989 the party had admitted that product is given dry punch and, accordingly, Collector was right in observing that after dry punch it becomes the finished products. There is no stipulation in the H.S.N. Notes that both ends should be covered by fibre to treat the item as `felt' as it was rightly pointed out by the Departmental....