SETHURAMAN, J. -
(1.) IN this tax revision case filed against the order of the tribunal, dt. 19th October, 1973 made in App. 142 and 540 of 1973, the question raised is whether the collar stiffening materials are liable to exemption from levy of multi-point tax. The assessee is a dealer in cotton cloth, yarn and tailoring materials. The collar stiffening material which is the subject-matter of the dispute consists of a rather oblong shape piece of cotton material which is described as buckram cloth about 41 cm. Long and 11 cm. Broad on which is bonded a spread-out cotton collar. The cotton collar was treated with some special kind of adhesive and placed on the oblong buckram cloth with the specially treated surface resting on the buckram cloth and by some heat process applied to the collar, the collar is bonded on to the buckram cloth. The spread out collar has a lengthwise slit running in the middle. There are also eyelets at either end of the collar. This material is sold by the dealer to the tailors. The tailors cut out the pieces of oblong buckram cloth projecting beyond the edges of the collars bonded on the buckram cloth. The edges of the collar are also stitched. The buckram cloth with the collar bonded on it buckram cloth with the collar bonded on it is folded along the slit in the middle of the collar. When this is done, the folded buckram cloth and the collar bonded on it take the appearance of a regular folded collar which is then stuffed as inner lining for collars of shirts which are stitched by tailors. The linings so used help to keep the collars stiff and these collar stiffening materials are used in the manufacture of readymade shirts like liberty shirts. These materials are sold in pieces of dozens to the manufacturers of readymade shirts as shown by the carbon copy of the bills produced by the assessee before the sales tax authorities.
(2.) THE assessee claimed that these materials come within the scope of item 4 of the third Schedule. THE items described in the third schedule are exempt from tax under S. 8 of the Tamilnadu General ST Act, (item 4 of the third Schedule runs as follows - "all varieties of textiles (other than durries, carpets, druggist and pure silk cloth) made wholly or partly of cotton, staple fible, rayon, artificial silk or wool including hand-kerchiefs, towels, napkins, dusters, cotton velvets and velvteen, tapes, niwars and laces and hosiery cloth in lengths. Alternatively the assessee claimed exemption on the ground that those ar declared goods under S. 14 of the Central ST Act. THE entry in s. 14 of the Central ST Act runs as follows : 14 (ii-a) : Cotton fabrics, as defined in Item No. 19 of the First Schedule to the Central Excise and Salt Act, 1944. " * Item No. 19 of the First Schedule to the Central Excise and Salt Act, 1944, to the extent runs as follows - "cotton'fabrics'means all varieties of fabrics manufactured eithe wholly or partly from cotton and includes dhoties, sarees, chadders, bedsheets, bed speads, counterpanes, table clothes, empbrioedery in the price, in strips or in motifs and fabrics impregnated or coated with preparations of cellulose derivatives or of other artificial palstic materials, but does not include any such fabric if it contains - (i) 40 per cent or more by weight of silk; (i) 40 per cent or more by weight of rayon or artificial silk; or (iii) 60 per cent or more by weight of rayon or artificial silk; or (iv) 50 per cent or more by weight of jute (including bimplipa tam Jute or mests fibre);
We have first to examine the question as to whether the collar stiffening material comes within the scope of all varieties of textile". The word" textiles"has the following meaning as shown in the" Mercury Dictionary of Textile Terms"-" Textile" * -any product manufactured from fibres; looping or any other means, in such a manner that he flexibility strength and other characteristics, properties of the individual fibres are not suppressed". In the way in which the term is understood from the above dictionary, namely, that any product manufactured from a fibre would come within the scope of the word'textile". The Courts have gone into the concept of the word 'textile'in the light of the entries in the Tamil Nadu General ST Act. In state of Madras vs. T. T. Copalaier & Anr. , it was held that braided cords are textile. Similarly in Dy. CTO vs. Madurai Printing tape factory, tape produced by cotton thread pasted together paralleledwise was'textile'within the meaning of entry 4 of the third Schedule. It was held in that case as follows - "tapes made as a result of weaving would clearly be within the entry. But, would it be so if he normal pattern of producing textile by using the wrap and woof pattern of thread is not applied. In our view, that will not be conclusive. We are inclined to think that weaving is not necessarily limited to that type of weaving. In modern advancement of textile technology, it is now possible, without using the wrap and the woof pattern to produce tape, by holding the threads together lengthwise by using gum. To a casual look, the product resembles a tape which has been woven in the normal sense on the loom. But it is not the appearance alone, but what is necessary for weaving is that threads are bound together in order to produce a pattern of fabric or tape." In State of Tamil Nadu vs. East India Rubber Works, 1974 (33) STC 339, it was held that the expression'textiles'usually refers to cloth or fabrics made by weaving, knitting, netting, or braiding and classified according to their component fibres such as silk, wook. Cotton, linen and such synthetic fabrics as rayon, nylon, etc. and the essence of textiles consists in the basis process of spinning and weaving. A consideration of these decisions would show that the essence of textile is the spinning of the cotton or other fibre and weaving such yarn so as to produce a definite patterned article or commodity. It has been held also that textiles do not include ready made garments within the scope of item 4 of the third Schedule (See CST, Bangalore. The principle is that when once a manufacturing or other operation is carried on in the cloth, then the cloth ceases to be a textile within the scope of item 4 of the third Schedule. 3. In the present case from the description of the stiffening material given earlier, it will be seen that it is a piece of cut cloth with some processing added to it. Hence, it is not such as to come within the scope of item 4 of the third Schedule to the Tamil Nadu General ST Act.
We have, however, to examine the question as to whether the material comes within the scope of item (ii-a) of S. 14 of the central ST Act. We have already extracted the entry as such in the said provisions. We have also extracted the relevant portion of the Central ST Act, 1944. The point to be considered is whether the present piece of cloth can be called a cotton fabric which means all varieties of fabrics manufactured either wholly or partly from cotton.'cotton fabrics'mentioned in item (ii-a) of S. 14 of the Central ST Act are as defined in item No. 19 of the first Schedule to the Central ST Act, 1944, Though for purposes of item 4 of the third Schedule to the Tamil Nadu General ST Act ready-made garments would be excluded from consideration because of some processing of manufacture carried on in them, still in view of the definition of the words'cotton fabrics'namely, all varieties of fabrics manufactured either wholly or partly from cotton, the fabric as such should be taken into consideration. The word'fabrics'means, a thing put together, woven material. In the present case, there could be no dispute about the fact that the stiffening material is prepared out of cotton and is put together by processing of manufacture. There is nothing to show that by reason of the manufacturing process on in a case like this for the purpose of preparing the stiffening material the product is taken out of the category of'cotton fabrics'as used in item (ii-a) of S. 14 of the Central ST Act. In this view, even though may not be exempt under the provisions of S. 8 of the tamil Nadu General ST Act, we consider that it would come within the scope of s. 14 (ii-a) of the Central ST Act and is therefore me liable to be taxed under the Tamil Nadu General ST Act. As the consequence S. 14 (ii-a) of the Central ST act had not been fully considered by the Tribunal we remand the case to the tribunal for a fresh consideration of the matter. Subject to the above observation, the tax revision case is allowed. There will however, be no order as to costs.;