GARWARE SYNTHETICS LTD Vs. CCE

JUDGEMENT

(1.) THE issue for determination in these appeals is the classification of (a) nylon bristles for brushes and (b) nylon fishing lines, both of cross sectional dimension below 1 mm, manufactured by the appellants herein. In appeal No. E/873/92 -D, the period covered falls both under the Schedule to the erstwhile Central Excise Tariff as it stood upto 1.3.1986, and under the Schedule to the CETA 1985, while the period covered in the remaining 2 appeals is post 1.3.1986. The appellants contend that prior to 1.3.1986, the above mentioned two products fell for classification under TI 15A(2) as already held by the Tribunal in their own case vide Final Order No. 611/97 dated 25.7.1997, while the classification claimed for the period subsequent to 1.3.1986 is under CET Sub -heading 3922.90; on the other hand, it is the contention of the Revenue that prior to 1.3.1986, these products fell for classification under TI 18 and after the introduction of the new Tariff, the products are covered by CET Sub -heading 5406.19.

(2.) WE have heard Shri N.C. Jain, learned Advocate who submits that the classification dispute for the period prior to 1.3.1986 is settled by the Tribunal's Order cited supra in their own case. Regarding the classification after introduction of the new Tariff, he submits that the change in Tariff does not amount to change in product and since the two products in dispute have already been held to be articles of plastics for the purpose of classification under TI 15A(2), they continue to be articles of plastics and cannot be treated as textile material for the purpose of classification under Chapter 54 of the Schedule to the CETA 1985. In this connection, he relies upon the decision of the Hon'ble Supreme Court in the case of BPL Pharmaceuticals . He contends that the appellants claim that the products are not recognised as textile material is supported by affidavits from purchasers/dealers in the products and this claim has not been rebutted by the Department. He cites the decisions of the Apex Court in the case of Bhor Industries and in the case of Moti Laminates in support of the proposition that the items must be marketable as textile material in order to justify classification under Chapter 54 and that in the absence of any material brought on record by the Revenue that the disputed products are marketed as textile material, learned Counsel submits that they cannot be regarded as such. He cites the ISI specification IS : 1324 -1966 wherein the "mono filament" has been defined as "a single filament of sufficient size to function as a yarn in normal textile operations," and submits that the synthetic mono filament which is used by the appellants to manufacture bristles for brushes and fishing lines cannot be woven into fabrics and cannot function as yarn in normal textile operations and hence cannot be considered as synthetic mono filament for the purpose of Chapter 54. He also refers to Note 1 of Chapter 39 of the Schedule to the CETA 1985 which stipulates that throughout the Schedule, the expression "plastics" does not apply to materials regarded as textile materials of Section XI" (under which Chapter 54 falls). He further submits that the disputed products are treated as articles of plastics for the purpose of levy of sales tax. Lastly he submits that in the event of upholding of the Revenue's claim of classification under Chapter 54, the benefit of modvat credit of duty paid on the inputs used in the manufacture of the disputed products should be extended and the non -filing of declaration under Rule 57G of the Central Excise Rules 1944 (modvat declaration) should not be a ground for denying this benefit, as the appellants were all along contending that their products were classifiable under CET Sub -heading 3922.90 and exempted from duty in terms of Sl. No. 38 of the Table annexed to Notification 132/86.

(3.) OPPOSING the above, learned SDR, Shri Prasad, draws our attention to the order of the Tribunal in the case of Pioneer Sports Works which has been relied upon in the appellants case cited supra and points out that there has been no categoric finding on classification in the Pioneer Sports Works case which has only extended the benefit of doubt while setting aside the classification under TI 18, and he submits that the Tribunal is empowered to reconsider the classification of the products under the old Tariff. He submits that the use of textile material for industrial use such as nets, bristles, fishing lines, etc., is well recognised and refers to Notification 188A/62 -CE dated 3.11.1962 which exempts nylon yarn used for making fishing nets and parachute cords and he submits that this would buttress his argument that nylon yarn can not only be used for making fabric and yarn but also for industrial purposes as mentioned above. He, therefore, urges us to hold that the products are more appropriately covered by TI 18 of the Schedule to the erstwhile Central Excise Tariff. Regarding classification under the present Central Excise Tariff, he relies upon the HSN Explanatory Notes to Chapter 54 which clearly provides that synthetic mono filament of 67 decitex or more and of which no cross sectional dimension exceeds 1 mm are used according to their different characteristics in the manufacture of brushes, fishing lines, etc., and submits that in the absence of any dispute that the products satisfy the definition under Chapter 54, they cannot be classified any where other than under CET 5406.19 which is the most appropriate entry for them. He also refers to the definition of textile material contained in Fair Child's Dictionary of Textiles at page 613 which states that the textile material is an "inclusive term" for fibres, yarn, fabrics and products which keep relatively the same tensile strength, flexibility and properties of the original fibres, and that the products in dispute satisfy the above tests and are, therefore, to be regarded as textile materials and hence classifiable under Chapter 54.