TaxTMI 
TaxTMI 
TaxTMI 
2016 (10) TMI 514
X X X X Extracts X X X X
X X X X Extracts X X X X
....uring sofa sets, chairs etc. During the process of manufacture at the first stage of lamination, in order to get a proper width, side strips are cut. These side strips have partially fabric and partly lower and upper coating. In the next stage where the foaming is done, the PVC laminated cloth is put for further process and as a result, the sides get pin holes and after foaming process is complete, sides with pin holes are cut. In both the processes i.e. lamination as well as foaming, side strips emerge, which are treated by the appellant as waste and identified as foam patti which are sold by the appellant by weight to waste and scrap dealers. The sale price is on the basis of rate per kg. It is the case of the Revenue that the said foam p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t is his submission that this proposition is well settled by the judgment of the apex court in the case of Toyo Engineering 2006 (201) ELT 513 (SC), Brindavan Beverages 2007 (213) ELT 487 (SC) and Shital International 2010 (259) ELT 165 (SC). It is his further submission that the adjudicating authority as well as the first appellate authority have ignored the direction of the apex court in remand proceedings. The apex court in the remand proceedings has directed to determine as to whether foam patti is classifiable as laminated textile fabrics or not. Instead of giving findings on the directions of the apex court, both the lower authorities have held that foam patti is chindies after 2.5.1988. Hence the findings recorded a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ascertained whether foam patti is the sub-standard fabric or otherwise. It is his submission that the exemption notification cannot be relied upon for creating duty liability as is settled in the case of Kiran Spinning Mills 1984 (17) ELT 396, affirmed by apex court as reported at 1988 (34) ELT 5 (SC). It is his further submission that just because an item is finding mention under the tariff heading, cannot be held liable to duty as it has to be first ascertained whether it is obtained by a process of manufacture and whether it is marketable, both the ingredients are absent in this case. It is his further submission that heading 59.03 will not cover waste and scrap of fabrics and hence foam patti classified by department under heading....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed or laminated with plastics and tariff heading 59.03 talks about the same. He would submit that once there is no dispute that the products manufactured are textile fabrics, the remnants which arise are squarely covered under the residuary heading of 59.03. He would submit that this Tribunal in the case of National Leather Cloth Mfg. Co. 2003 (162) ELT 369, has specifically held that side trimmings of coated fabrics having width not exceeding 6 cms are to be classified as damaged or sub-standard textile fabrics. It is his submission that though the said decision interprets the words in a given notification, a general view has been expressed by the Tribunal to hold that chindies do fall under the chapter heading 59.03 as damaged or su....
X X X X Extracts X X X X
X X X X Extracts X X X X
....either in the hands of a tailor or in fabric manufacturing industry. 7.2 Secondly, we find from the allegations made in the show cause notice as addressed to appellant directed them to show cause why the products cleared by the appellant are sub-standard fabrics and damaged fabrics (including foam patti or side strips as called by the party). There is no allegation in any of the show cause notices that the products on which the demand of duty has been raised, need to be considered as chindies or otherwise. In the absence of any allegation in the show cause notices that the disputed product are to be classified as chindies, applying the ratio of the case of National Leather Cloth Mfg. Co. as cited by the learned departmental representative,....