TaxTMI 
TaxTMI 
2005 (3) TMI 117
X X X X Extracts X X X X
X X X X Extracts X X X X
....ates appearing for the parties. [Judgment per : Ruma Pal, J.]. - The respondent is engaged in the manufacture of Textiles, namely; grey cotton canvas cloth, hundred per cent cotton/grey cotton, belting and duck. The issue to be resolved is whether these goods are classifiable under Tariff Headings (TH) 52.02, 54.08 or 59.09 of the Schedule to the Central Excise Tariff Act, 1985. The appellant contends that they are classifiable under TH 59.09. The respondent on the other hand cleared the goods classifying them either under TH 52.02 or 54.08. Consequently on 23rd September, 1992 24 show cause notices were issued by the Excise Authorities to the respondent to show cause why differential duty amounting to Rs. 545,10,838/- should not be reco....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ading No. Sub-heading No. Description of goods Rate of duty Basic Additional 1 2 3 4 5 59.09 5909.00 All other textiles products and articles of a kind suitable for industrial use 12% (for example, textile fabrics, combined with one or more layers of rubber, leather or other material, bolting cloth, endless felts of textile fabrics, straining cloth) 4.The conclusion in Simplex I was arrived at on the basis that TH 59.09 referred to fabrics for industrial use and that fabrics for industrial use was a specific description and applying Rule 3(a) of the Interpretation Rules, TH 59.09 would prevail over general descri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tton tyre cord fabrics, grey, belting cloth, grey filter cloth/straining cloth and grey belting cloth and belting duck, generally having technical uses and generally not used for making clothing, household linen, bedspreads, curtains, other furnishing articles, etc. shall henceforth be classified under Heading No. 59.11 of the CET; B. the grey cotton canvas and grey cotton duck, not having technical uses, shall henceforth be classified under Chapter 52 of CET; and C. the grey cotton belting shall henceforth be classified under heading 59.10 subject to note 6 to Chapter 59." The 1997 Circular virtually reproduced the decision in Simplex I which had held that the respondents' goods were correctly classifiable under TH 59.09 (subseque....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aside the order of the Commissioner (Appeals). The question is was Jyoti Overseas right in overruling Simplex I ? 7.The three Chapters, namely; Chapters 52, 54 and 59 are contained in Section XI of the Central Excise Tariff. At the relevant time, Section Note 5 defined the word "made up" for the purposes of the entire Section as meaning :- "(a) Cut otherwise than into squares or rectangles; (b) Produced in the finished state, ready for use (or merely needing separation by cutting dividing threads) without sewing or other working (for example, certain dusters, towels, table cloths, scarf squares, blankets); (c) Hemmed or with rolled edges, or with a knotted fringe at any of the edges, but excluding fabrics, the cut edges of which....
X X X X Extracts X X X X
X X X X Extracts X X X X
....th or simply cut to rectangular (including square) shape (other than those having the character of the products of heading numbers 59.07 and 59.08)". From this, read with SN-5 and 6, we may infer that the context of TH 59.09 requires that it apply to 'made up' goods. Running lengths of unprocessed textiles or non-made up goods therefore would not be covered by this paragraph. 9.Paragraph 'b' of SN-6 also pertains to "textile articles (other than those of heading principles 59.07 and 59.08) of a kind used for technical purposes [for example textile fabrics and felts, endless or fitted with linking devices, of a kind used in paper making or similar machines (for example, for pulp or asbestos cement), gaskets, washers, polishing discs and o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ule-I gives primacy to the Section and Chapter Notes along with terms of the headings. They should be first applied. If no clear picture emerges then only can one resort to the subsequent rules. The appellants have relied upon Rule 3. Rule 3 must be understood only in the context of sub-rule (b) of Rule 2 which says inter alia that the classification of goods consisting of more than one material or substance shall be according to the principles contained in Rule 3. Therefore when goods are prima facie, classifiable under two or more headings, classification shall be effected according to sub-rules (a), (b) and (c) of Rule 3 and in that order. The sub-rules are quoted :- "(a) The heading which provides the most specific description shall ....