COLLECTOR OF CENTRAL EXCISE Vs. NEW SHORROCK MILLS

JUDGEMENT

(1.) THIS is a proceeding initiated by the Government of India under Section 36 (2) of the Central Excises and Salt Act, 1944, which under Section 35P ibid stands transferred to this Tribunal to be disposed of as if it were an appeal presented before the Tribunal.

(2.) THE facts in brief are that the respondents were manufacturing two varieties of fabrics, which they called Sort Nos. 4004 and 1819. These were cleared under Item 22 of the Central Excise Tariff as "Art Silk Fabrics". Subsequently, it was observed by the Central Excise authorities that these varieties contained more than 40% of cotton and more than 30% of non -cellulosic fibre at the grey stage and in that stage were considered to be classifiable under Item 19 I (1A) of the Central Excise Tariff as in force at the material time, as cotton fabrics. However, these fabrics were subjected to a "Carbonise process of printing", and as a result the percentage of cotton fell below 40% and the percentage of non -cellulosic fibre became .60%, bringing them within the definition of "Art Silk Fabrics" classifiable under Item 22 CET, under which they were assessed to duty and cleared. The Superintendent of Central Excise accordingly issued a show -cause notice on 18/19 -3 -1974 to the respondents under Rule 10 of the Central Excise Rules, 1944, for the recovery of Rs. 25,462.38 (basic duty) and Rs. 112.47 (additional duty), being the difference between the duties paid under Item 22 CET and the duties which would have been payable under Item 19 CET, during the relevant period, viz. November 73 to January 74.

(3.) AFTER considering the respondents' reply, the Assistant Collector held that since the fabrics in question before carbonisation contained more than 40% of cotton by weight they were classifiable under Item 19. He accordingly confirmed the demand for differential duty.