INDIAN CARD CLOTHING CO LTD Vs. ASSTT COLLECTOR OF CUSTOMS REFUND

JUDGEMENT

(1.) I have heard Shri N.D. Khosla, consultant for the appellant who appeared for personal hearing today. The case has come from Tribunal by remand. The impugned order dated 25.7.1984 had rejected refund claim Of the appellant on the ground that Card Clothing Foundation imported by the appellant was not cut to size and shape to form identifiable part of the machine and as such it was in the form of Cotton Fabric and so correctly assessable under Tariff item 19(i) of C.E.T. He had also placed reliance on the invoice and the packing slips indicating that the goods were cotton fabric. After carefully hearing learned advocate, seeing sample of the impugned product and also going through certain other orders cited by the learned advocate viz. S/49 - 495/88 CL, S/49 - 21/88 CL, S/49 - 444/87 CL, S/49 - 471/87 CL, passed by Collector of Customs, Appeals, Bombay and also the case of M/s. International Conveyer Ltd., in the R.A. before Addl. Secretary, Govt. of India, Deptt. of Revenue against order No. V2 (68)/689/79/8620 dated 23.10.1981. In para 12, it lays down that to classify the goods under CET 19, cotton should be in predominance. I am thus of the view that the goods in question cannot be considered as cotton fabric. In order to be cotton fabric, 3 conditions are required to be satisfied. Firstly, the article must be fabric, secondly it must have been manufactured, and thirdly it should have been manufactured wholly or partly from cotton. Examination of the sample and also the case record indicate that the product i.e. goods under importation are composite article of certain thickness which is used as base i.e. card clothing foundation. It just cannot be considered to be Cotton Fabric. This point is further clarified by additional facts brought to notice at the time of hearing through affidavit. According to the affidavit, percentage by weight of cotton fabric ranges from 7 to 13% Composition of the article is as follows:

(2.) As per the definition in the Central Excise Tariff, Cotton must predominate in cotton fabric which is not the case here. It is a composite item and is known in trade as card clothing foundation which is quite distinct from cotton fabric. As such, lower authority has evidently erred in rejecting refund claim, on the basis that the C.V. Duty was chargeable under Tariff Item 19(1) of C.E.T. The impugned order is set aside and the appeal admitted.