NATSON LAMINATES Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) THE issue involved in this appeal filed by M/s. Natson Laminates is whether the benefit of Notification No. -C.E., dated 1 -3 -1988 is available to laminated fabrics manufactured by them.

(2.) BRIEFLY stated the facts are that the appellants manufacture laminated fabrics falling under sub -heading 5903.19 and 5903.29 of the Schedule to the Central Excise Tariff Act and claimed exemption under Notification No. . Six show cause notices were issued to them for denying the benefit of the notification on the ground that they were using base fabrics other than the fabrics falling under Chapter 52, 54 or 55 of C.E.T.A. The Assistant Collector, under order dated 17 -5 -1991, approved the classification lists allowing the benefit of notification, holding that the intention of the Government was to recover duty if not already paid on base fabrics used for lamination purposes and not that the base fabrics should be of specific Chapter; that the Notification did not carry any condition that the base fabrics should be of Chapter 52.54 or 55.

(3.) APPEARING on behalf of the appellants, Shri R. Swaminathan, learned Advocate, submitted that the appellant is engaged in the manufacture of cotton fabrics laminated with P.U. Foam; that the base fabric used by them is a knitted cotton fabric falling under Heading 60.01 of C.E.T.A.; that under Notification No. , the effective rate of duty for sub -heading 5903.19 "textile fabrics, impregnated, coated, covered or laminated with plastics, of base fabrics of cotton" was Rs. 4.50 per square metre plus the duty for the time being leviable on the base fabrics under Chapter 52, if not already paid. He, further, submitted that if Revenue's interpretation is correct, it is evidently a case of accidental slip or omission in the Notification; that in the old Tariff, woven fabrics as well as knitted fabrics fell under Item 19(1); the laminated and coated fabrics fell under Item 19(III); that the purpose of new Tariff was to maintain the same rate of duty and not to bring any change in the rate of duty; that, therefore, Notification No. 141/86, dated 1 -3 -1986 was issued; that reference should have been made to base fabric of Chapter 52 or 60; that, however, reference was made only to base fabric of Chapter 52. He also mentioned that effective rate of basic excise duty on fabrics falling under sub -heading 5903.19, 5903.29 and 5903.99 were kept at Rs. 6/ -, Rs. 8.50 and Rs. 9 per sq. meter respectively under Notification No. 63/87; In the Budget 88, these rates were reduced by 0.50 p. each; that it is thus clear that Notification No. 63/87 was intended to have effective rate of duty for Headings 5903.19, 5903.29 and 5903.99. The Collector himself had written a letter dated 15 -2 -1989 to Board to delete references to Chapter 52 and the Govt. had done that in Notification No. 150/89, dated 12 -6 -1989 and 57/90 dated 20 -3 -1990. He further submitted that it is not open to the Revenue to infer from the column relating to the rate of duty in Notification to change the description of the product in the description column of the Notification; that the Revenue is virtually saying that the description of the goods should be "fabrics laminated with plastics when the base fabric is of Chapter 52". He contended that old Tariff Item 19(1) was not confined to only woven fabrics which now fall under Chapter 52 but covered knitted or crocheted fabrics falling under Heading 60.01; that consequently Notification No. 109/86, dated 27 -2 -1986 was issued effective from 28 -2 -1986; that in view of this Notification, it is not open to Revenue to infer that because the reference in last column of the Notification, is to base fabric falling under Chapter 52, description would also cover laminated fabric made of such base fabric falling under Chapter 52. The formula mentioned in column 4 (Rate of duty) is only a measure for computing the rate of duty and the formula does not require one to look at the duty actually payable on the fabric actually used; that in any case, the measure for computing the rate of duty would not change the description of the product. He referred to the judgment in J.K. Steel Ltd. v. U.O.I. -1978 (2) E.L.T. (J 355) (S.C.) - : 1969 (2) SCR 481. He also pleaded that as they are not manufacturer of any base fabric, the second part of the formula relating to rate of duty is inapplicable and reliance was placed on the decision in Decent Dyeing Co. v. C.C.E. - : 1989 (43) E.L.T. 782 (S.C.).