S. KUMARS LTD. Vs. CCE

JUDGEMENT

(1.) IN these appeals the controversy relates to the classification of the processed knitted pile fabrics in running length at the hands of the appellants who are the processors.

(2.) BRIEF facts of the case are that the appellants are processors of various Textiles Fabrics and also undertake the job work pertaining to the processing of knitted pile fabrics. They were receiving knitted pile fabrics in grey form from M/s. Dhvani Terefab Exports Pvt. Ltd. in running length of 300 Mtrs. which is being cut into convenient lengths according to the size of their machine. The appellants undertake the process of washing, dyeing and bleaching, hydro -extraction, tumble dyeing and drying. Before 23.7.96, both grey and processed fabrics were classified by the Revenue Department under Heading 60.01 of the Schedule to the Central Excise Tariff of the Act. After 23.7.96, the goods falling under Heading 60.01 of the Central Excise Tariff were granted exemption. The Revenue Department issued 3 show cause notices to the appellants for classifying the processed fabrics under Heading 63.07 of the Central Excise Tariff as "other made -up textile articles". The adjudicating authority confirmed the demand and imposed penalty. The appeals filed by the appellants were dismissed by the Commissioner (Appeals).

(3.) THE Divisional Bench of the Tribunal referred the matter to the Larger Bench for considering the following issue: