J.S. FABRICS Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appellant in their unit at Unnao, are engaged in the manufacture and clearance of "Canvas Canopy" for motor vehicles and tool bags and web equipment of textile material. They were classifying the canvas canopy (which is canvas tarpaulin) under sub -heading 6306 of the Central Excise Tariff and the webbing equipment and tool hugs under sub heading 6307 of the Central Excise Tariff. The Canvas canopy/Tarpaulin pieces were specially designed for vehicles of various models. The appellant were not paying any duty in respect of these items by availing the full duty exemption under Notification No. , dated 9 -7 -2004. The Department was of the view that canvas canopy, tool bags and web equipment being manufactured by the appellant, are parts or accessories of motor vehicle classifiable under heading 8708 and would not be eligible for exemption under Notification No. It is on this basis that a show cause notice dated 5 -12 -2007 was issued to the appellant as well as to their partner Sh. Sudhir Kumar Aggarwal for: -

(2.) SH . B.K. Singh, Advocate, the learned counsel for the appellant, pleaded that the appellant manufacture specially shaped canvas tarpaulin canopies for different models of lorries, tool bags and web equipment of textile material, that canvas canopies are made out of canvas tarpaulin, that the canvas canopies, though specially cut into shapes to cover goods loaded in open lorries of different models, flat not three dimensional, that while such tarpaulins meant for vehicles are covered under heading 6306, that the other items, tool bags and web equipments of textile material are covered under heading 6307, that all these items are fully exempted from duty under Notification No. dated 9 -7 -2004, as the same are textile items of Chapter 63 and the appellant during the period of dispute were not availing input duty Cenvat credit, that the main item canvas canopy/canvas tarpaulin specially designed for various types of vehicles are specifically covered under heading 6306 and the same cannot be treated as "part/accessories of motor vehicle under heading 8708", that according to the HSN Explanatory Notes to Chapter heading 6306, this heading covers tarpaulins which are used to protect goods stored in the open or loaded on ships, wagons, lorries etc. against bad weather, that they are generally made of coated or uncoated man -made fibre fabrics, or heavy to fairly heavy canvas and are waterproof, that specially shaped tarpaulin are also covered by this heading provided they are flat, that the tarpaulin canopies in this case are flat and hence the same are covered by 6306, that it is a general principle of classification that the specific heading should be preferred over general heading, and tarpaulins are specifically covered by heading 6306, that the Apex Court in the case of CCE, Chennai v. Tarpaulin International, reported in : 2010 (256) E.L.T. 481 (S.C.) has held that making tarpaulin made -ups out of tarpaulin fabrics by cutting the same to required size, stitching, margins and punching eyelets, would not amount to manufacture, as just because the tarpaulin fabric has been cut into particular rectangular sheets, hemmed along sides, fitted with eyelets, cords, straps etc., it still remains tarpaulin, that the ratio of this judgment is squarely applicable to this case are in this case the canvas tarpaulin sheets have just been cut into the required shape to cover the goods loaded in open lorries of certain models, that since tarpaulin canopies are correctly classifiable under heading 6306, the same would be fully exempt from duty under Notification No. as there is no dispute that the same are of textile material and no input duty credit has been taken, that the reason adopted by the Department for classifying this items as "motor vehicles accessory" under heading 8708 is without any basis, as the tarpaulin canopies are not three dimensional but are flat, that tool bags and webbing equipment are made of textile material and hence are classifiable under heading 6307 and would be fully exempt from duty under Notification No. and that in view of the above, the impugned order is not sustainable.

(3.) WE have considered the submissions from both the sides and perused the records. The only point of dispute in this case is as to whether the canvas canopies specially designed for lorries, tool bags and web equipment of textile material are classifiable under sub -heading 6306/6307 and hence fully exempt from duty under Notification No. or the same are classifiable as 'accessories of motor vehicle' under heading 8708.