TaxTMI 
TaxTMI 
2005 (1) TMI 8
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....v. CCE, Madras, [2004 (167) E.L.T. 491 (S.C.) = 2004 (62) RLT 240 (SC)]. Their lordships have upheld the classification of the assessees' tarpaulins under Heading 59.06. Para (8) of the judgment in Ugam Chand Bhandari (supra) is relevant and the same reads thus: "8. As stated earlier, finding recorded by the Tribunal as to the nature of the product is after examining relevant material with reference to relevant entries. The denial of cross-examination was due to the lapse of the appellant and cannot take advantage of the same in these proceedings. The Tribunal held that the fabric manufactured by the appellants is impregnated and, therefore, has to be considered as fabric impregnated with materials other than those mentioned under Tariff Headings 59.02 and 59.05. Such impregnation clearly indicated that under the scheme of the Central Excise Tariff the impregnated fabrics with a coating and which is visible to the naked eye on the material on record being one of the finding of fact, we cannot interfere with it. Hence, all the contentions of the appellants stand rejected. in view of the classification of the goods having been settled as above by the Apex Court, the present applicat....
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....lassification of the goods under SH 5906.90 are against these orders: Order-in-Original Revenue's Appeal No. No. 10/2000, dt. 30-6-2000 E/734/2001 No. 6/2000, dt. 14-8-2000 E/974/2001, E/975/2001 Appeal No. E/1296/2000 of M/s. Rohini Mills (P) Ltd. for classification of Tarpaulin made-ups under SH 5207.00 is against Order-in-Original No. 12/2000, dt. 30-6-2000 passed by C.C.E, Chennai -II classifying the goods under SH 6301.00 and confirming demand of duty thereon for 1994-95. 3. We have also before us nine other appeals with stay applications filed by assessees. Five of these appeals are against classification of Tarpaulin made-ups under SH 63.06 (as claimed by the Revenue) accompanied by demands of duty and are listed below Impugned Order Appeal No. Appellant Order-in-Appeal No. 19/2000, dated 10-10- 2000 E/62/200 M/s. Bharat Textiles & Proofing industries Ltd. Order-in-Appeal Nos. 189-192/2001, dated 18-9-2001 E/1095/01 E / 1096/01 E/1097/01 E/1098/01 M/s. Rohini Mills (P) Ltd. M/s. F. Harley & Co. M/s. Tarpaulin General Traders M/s. Calcutta Canvas Co. App....
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....his solution and passed through two rollers, whereafter the canvas was dried by exposure to atmosphere The tarpaulin so manufactured was cut to size and stitched to make what are called "tarpaulin made-ups". Some of the assessees fitted their tarpaulin made-ups with eyelets also. 7. According to the Revenue, the tarpaulin fabrics manufactured and cleared by the assessees during the material periods were classifiable under SH 5906.90. The assessees would classify the goods under SH 5207.00. The competing entries are as under: 52.07 5207.00 Cotton fabrics (excluding fabrics covered under Heading Nos. 52.09, 52.10 and 52.11), (a) woven on looms other than handlooms, and (b) subjected to the proc....
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....s covered partially fully with textile flocks or with preparation containing textile flocks: 5906.11 -- ------------- 5906.12 -- ------------ 5906.19-- ------------ 5906.90-- Other. 8. Note 5(a) to Chapter 59 of CETA Schedule is relevant to the classification issue and the same reads: "5. Heading No. 59.06 does not apply to: (a) Fabrics in which the impregnation, coating or covering cannot be seen with the naked eye (usually Chapters 50 to 55, 58 or 60); for the purpose of this provision, no account should be taken of any resulting change of colour" On the basis of the above Chapter Note and the opinion of the Chief Chemist, CRCL, New Delhi, the Board clarified in Circular No. 6/91-CX. 1, dated 11-4-1991 as follows:- "The issue has been further examined in the Board. Water-proofing is one of the processes specifically mentioned in Chapter 52 whereas Chapter 59 refers to impregnated/coated fabrics. The possible sub-heading for classifying the said fabric in Chapter 69 is 59.06 i.e., textile fabrics, otherwise impregnated/coated or covered. For classifying a product as otherwise i....
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....erial whereas water-proof fabrics are generally tightly woven and coated with rubber, plastic, linseed oil, cellulose esters etc. We have also seen the Glossary of Textile Term in the Handbook of Glossary of Textile Terms and the definition of impregnated Fabric and Water-proofing. On perusal of the definitions in the Glossary, we note that in the case of impregnated fabric the interstices between the yarn are completely filled with the impregnating compound whereas in water-proofing the interstices of the fabric as well as the surface of the material are covered with a film or skin in such a manner that the treated material is not only water-repellent, hut impermeable to air and moisture. Looking at the process of manufacture undertaken by the appellant, we note that for making the product the canvas cloth is passed through a mixture of Wax, Resin, Red Mud, D.B. Oil, colour etc. and then pressed through two rollers. The resultant product was wax coated canvas cloth. Thus, the process undertaken appears to be that of water-proofing in as much as not only the interstices of the fabric are covered but the surfaces of the material are covered with a film or a skin. We have also perus....
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.... impregnated with preparation containing waxy material. All of them are of the view that "visible to the naked eye" is applicable only to fabrics laminated with resins/polymers and this criteria is not applicable to fabrics of the type in question (waxed fabrics). All the opinions state that "no layer is visible to the naked eye". It is pertinent to differentiate between coated fabrics and impregnated fabrics. "Coated fabrics" are those in which the surface of fabric is coated or covered and thus hides the whole surface of the fabric, here the "visibility of the coating is of relevance whereas in impregnated fabrics "visibility criteria" is not necessary as is inferred from the definition of "coating" and "impregnation" given below from the monograph, Fairchild's Dictionary of Textiles: Impregnation: 'A fabric in which the interstices between the yarns are completely filled with an impregnating compound throughout the thickness of the material as distinguished from sized or coated materials where the material is applied on the surface and the interstices between are not completely filled." However Chapter 59.07 - CET (which) reads as "Textile fabrics otherwise impregnated, coa....
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....r dated 26-4-99. These expert opinions virtually stood corroborated with the above report of the Director (Revenue Laboratories) and the same were not contested by the Chemical Examiner when called upon to comment on them. The Department could not prove that the tarpaulin fabrics had "layer formation visible to the naked eye". On the other hand, the available evidence showed that there was no visible layer formation on the fabrics. The fabrics did not pass the test laid down in the Board's Circulars (which are binding on the Revenue in these, cases) for classification under Heading 59.06. The fabrics, on the other hand, qualified to be classified under Heading 52.07 for the reasons noted by the Bench in Ratan Tarpaulin Water Proof Industries (supra). 11. Apart from Ratan Tarpaulin (supra), a plethora of decisions, old and new, were cited by learned Counsel in support of the plea for classification of Tarpaulin fabric under Heading 52.07. In the case of Binny Ltd v. Collector of Central Excise, Madras, 1986 (26) E.L.T. 46 (1), the goods considered for classification was tarpaulin fabricated by the assessee from proofed coloured canvas procured from various proofers during the perio....
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.... classification of similarly manufactured tarpaulin fabrics, we hold that the tarpaulin fabrics' manufactured by the assessees during the material periods are to be classified only under heading 52.07 of the CETA Schedule and not under heading 59.06 of the said Schedule. In the result, the Revenue's appeals claiming classification of the said goods under heading 59.06 are liable to be rejected. 13. As regards "tarpaulin made-ups", we have already mentioned how these "made-ups" were made out of tarpaulin fabric. Tarpaulin fabric was cut to size, stitched and "eyeletted" to obtain what are called "tarpaulin made-ups". It has been contended on behalf of the assessees that no manufacture was involved in this process. On the other hand, the Revenue has contended that tarpaulin made-ups are a distinct marketable commodity known to Trade and, therefore, it should be held to be excisable. It has also been pointed out that SH 6301.00 (Heading 63.01) is an entry specifically covering made-up textile articles including tarpaulin. It has been argued that, on account of this specific coverage of the item in the Central Excise Tariff, it should be held to be exigible to duty. Both sides have al....