JERSY INDIA LIMITED Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THESE two appeals are on the same issue. They were, therefore, heard together and are being disposed of by this common order. The issue is of classification of knitted cotton fabrics and other knitted fabrics containing elestomeric yarn.

(2.) THE facts of the case in brief are that the appellants manufacture knitted fabrics of yarn and other knitted fabrics containing elestomeric yarn. The assessee claimed that the yarn was classifiable under sub -heading 6002.92 whereas the department had held that the yarn was classifiable under sub -heading 6002.30

(3.) SHRI M. Chandrashekharan, ld Sr. Advocate along with Shri R. Krishnan, ld. Advocate appeared for the appellants who submitted that the test report relied upon in the SCN shows that the fabrics in dispute contain 90.7% of cotton and 9.3% of elestomeric yarn. He submitted that thus cotton predominated in the composition of the knitted fabrics. He, therefore submitted that the principle for classification of this fabric appeared under Note 2(A) of Section XI of the Tariff which inter alia lays down "Goods classifiable in Chapters 50 -55 or in Heading Nos. 58.09 or 58.02 and of mixture of two or more textile materials are to be classified wholly of one textile material which is predominant by weight over any other single material." He submitted that elestomeric yarn has been defined "Filament yarn, including monofilament of synthetic textile material, other than textured yarn, which does not break on being extended to 3 times its original length and which returns, after being extended to twice its original length, within a period of 5 minutes, to a length not greater than one and half time its original length." He submitted that there is no dispute that the yarn used by them was elestomeric yarn. He referred to Note 2(A) to Section XI and submitted that this Note provides "Products of Chapters 56 to 63 containing 2 or more textile materials are to be regarded as consisting wholly of that textile material which would be selected under Note 2 above in the classification of product of Chapters 50 to 55 consisting of same textile material. He submitted that after reading the above note it becomes clear that for classification of the product under Chapters 56 to 63 predominance of textile material is the deciding factor. He submitted that admittedly their product falls under Chapter 60 and, therefore predominance of the textile material will be the deciding factor for determining classification of this product. He referred to the Interpretative Rule 5 of the rules for interpretation of Central Excise Tariff and submitted that this rule provides "For legal purposes, the classification of goods in the sub -heading of a heading shall be determined according to the terms of those sub -headings and any related sub -heading notes and, mutatis mutandis, to the above rules, on the understanding that the only sub -headings at the same level are comparable. For the purposes of this rule, relative chapter and section notes also apply unless the context otherwise requires". Ld. Sr. Advocate submitted that if this interpretative rule is applied in the above context then the product of Chapters 56 to 63 shall be classifiable in terms of the chapter and section notes. He submitted that the Chapter Note 2(A) clearly provides that the deciding factor for classification for product classifiable under Chapters 56 to 65 where the product contains 2 or more textile materials then the textile material which predominates will be the deciding factor. He submitted that in terms of the above, their product shall qualify for classification under Chapter Sub -heading 6002.92. He, therefore prayed that the appeals may be allowed.