SUPREME COURT OF INDIA
Commissioner of Central Excise, Ahmedabad
Vs.
Messrs Susma Textile Private Limited
C.A.No.1081 of 1998
(S. R. Babu and G. P. Mathur JJ.)
05.05.2004
Rajendra Babu CJI., J.
1. The question that falls for consideration in this batch of cases is as
to the classification of the bleached sheeting which is heavily sized and
manufactured by each of the respondents and whether the same falls under
Heading 52.06 of the Central Excise Tariff Act, 1985 [for short 'the
Act'] or under Heading 59.01 as sought by them.
2. The respondents are engaged in the manufacture of cotton fabrics which is
stiff and heavily sized with starch gum and inorganic fillers. The respondents
classified this product under Heading 52.06 by declaring their product as
subjected to the process of bleaching and finishing. However, later on, when
the Department inspected the unit of the respondents, they thought that the
product in question will have to be classified under Heading 59.01. Sample of
the product was taken for testing and the report thereto is that the sample is
in the form of open weave cotton fabrics heavily sized and stiff with starch
gum and inorganic fillers on treatment with hot water the fabrics looses all
its stiffness. On this material, a show cause notice was issued to the
respondents demanding differential duty for different periods. The Assistant
Commissioner, Central Excise, by his order made on 16.8.1989, dropped the
demand raised in the show cause notice by holding that the said cotton fabrics
were correctly classifiable under Heading 52.06 and approved two classification
lists accordingly.
3. The matter was carried in appeal to the Collector [Appeals] who allowed the
appeal and affirmed the demand of duty by holding that the product in question
is specifically covered under Heading 59.01which provides a specific tariff
entry for stiffness textile fabrics. The matter was further carried to CEGAT.
The Tribunal held that the cotton fabrics though heavily sized do not have
permanent stiffness to be treated as similar to 'Buckram' and accordingly
classifiable under Heading 52.06 and not under Heading 59.01 of the Act. Hence
these appeals.
4. We may, however, notice that in Collector of Central Excise, Aurangabad vs.
Solapur Zilla Vinkar Sahakari Federation., 1997 Indlaw CEGAT 386, the
tribunal held that stiffened fabrics generally used in the interior of garments
having been processed into bleached and grey sheeting by applying topioca
starch, maize starch, french chalk power and delomits which render the fabrics
stiffening effect, are classifiable under Heading 52.06 of the Act and not
under Heading 59.01 thereof. The matter was carried in appeal to this Court in
Civil Appeal No.3965 of 1998 and this Court, on 22.2.1999, dismissed the same,
both on the ground of delay and on merits.
5. The Revenue contended:
“1. that specific description of Heading 59.01, viz., textile fabrics coated
with gum of amylaceous substances of a kind used for the outer cover of book or
the like is satisfied in this case;
2. Explanatory Note to HSN made it clear that not only cloth, plain weave woven
fabrics, usually of cotton, linen or man-made heavily coated with gum or
amylaceous substances which is used for book binding, but also such cloth with
other end-uses, would get cover under this heading.”
6. The tribunal held that the Board by their instructions issued on 2.9.1988
had clarified that for classifying such products under Heading 59.03, the
textile fabrics should have a continuous and adherent films or layer on one
side of the fabric surface and the fabric should be impervious and should
satisfy the conditions prescribed in Note 2 of Chapter 59. They also adverted
to letter issued by the Ministry of Finance, Department of Revenue dated
7.12.1989 wherein it had been confirmed that bleached and sized cotton fabrics
manufactured by them merit classification under Chapter 52 as these fabrics were
neither coated nor impregnated but only sized with starch. On behalf of the
Revenue, the contention put forth before the tribunal is that the scope of
expression 'Buckram and similar stiffened textile fabrics' could not be
restricted by reference to first half of the heading relating to coating and
should be interpreted in its ordinary manner and that if the stiffened fabrics
is similar to Buckram, tracing cloth, book binding cloth, etc., it would be
appropriately regarded as stiffened fabrics covered by sub-heading 5901 since
the general heading of processed fabrics falling under sub-heading 5206.
Further, the book binding cloth would be covered by the expression 'Buckram'
and similar textile fabrics of sub-heading 5901. Several text books and
dictionaries were also referred before the tribunal. All the contentions
advanced on behalf of the Revenue were refuted by the learned counsel appearing
for the assessees and elaborate arguments were submitted before the tribunal
that the product in question is not a 'Buckram' or something akin to 'Buckram'
inasmuch as 'Buckram' referred to permanently stiffened fabric and once the
interstices of cotton fabrics were filled and treated with gum, then alone it
would come under Chapter 59 and in the present cases the item is porous padded
and the interstices are not filled and, therefore, the product cannot go under
Chapter 59 at all. The tribunal noticed firstly as to the maintainability of
the appeal and thereafter on merits of the matter. The tribunal proceeded on the
basis that the burden of classification is on the Department and no evidence
had been placed by the Department to show that the product is a 'Buckram' and
it requires to be classified under Chapter 59 and Explanatory Note IV to
Heading 59.01 indicates that 'Buckram' and similar stiffened textile fabric of
a kind used for that foundations would fall under this heading. There is also
an indication that certain varieties of 'Buckram' and are similar fabrics made
by pasting together to such stiffened fabrics and used mainly in the
manufacture of hat foundations of Heading 65.07 would also be fall under this
heading and that the textile fabrics coated with gum and amylaceous substances
of a kind used for paper coverings of books or the like, tracing cloth, prepared
binding 'Buckram' and similar stiffened textile fabric of a kind used for hat
foundation would be covered under this heading. After adverting to certain
definitions in the Dictionary of Textiles held that an impregnated fabric is
one in which interstics between the yarn are to be completely filled with
impregnating compound throughout the thickness of the material. The definition
of 'Buckram' and Library Buckram also indicates that it is heavily sized. The
definition of sizing indicates that it is a generic term for compounds when
applied to yarn or fabric form a more or less continuous solid film around the
yarn and individual fibres. The chemical examiner in his report had stated that
each of the eight samples are in the form of open woven bleached cotton fabrics
sized with starch and each is somewhat showdy. On treatment with hot water,
each looses of stiffness. The interstics between the yearn were not closed. The
overall count is less than 51 as determined on the basis of yarns taken out
from the fabrics in each case. Therefore, the test result indicates that the
interstics are not filled in these cases and there is no permanent stiffness.
The requirement of heading 59 clearly shows that the textile fabric has to be
stiffened and the definitions which are relied by the Revenue indicates that
the sizing have to be heavy and the interstics have to be filled and the
stiffness has to be permanent; that the test results do not support the
department's case and also there is no specific finding that the material is a
'Buckram'. They also adverted to the tariff advice No. 36.84 dated 27.7.1984
issued to all the Collectors indicating that the object of exemption is to
cover such fabrics which are treated only to achieve a temporary effect of
sizing [stiffening] and gloss and addition of wetting agents, optical whitener,
fatty matter and fillers are meant only to help padding process so as to give a
temporary brightness to sized fabrics, to soften the starchy film left on the
fabric and to give a better and fuller appearance. However, these additives get
removed from the fabric when the starch is washed up. Based on this material,
the appeal filed before the tribunal was rejected.
7. The learned counsel for the appellants contended that the tribunal has gone
on the basis of issue of permanent stiffness and not dealt with other aspect
whether the fabric in question is heavily sized or not.
8. Heading 59.01 reads as follows:
"Textile fabrics coated with gum or amylaceous substances, of a kind used
for the outer covers of books or the like; tracing cloth; prepared painting canvas;
buckram and similar stiffened textile fabrics."
9. In Fairchild's Dictionary of Textiles, which is an authority to the text
book on the matter, sets out what 'Buckram' means:
"A plain weave, coarse, open fabric heavily sized and used principally as
stiffener which is placed between the lining and surface cloth of the garment
to give it shape or form. Also used for hat shapes, book binding, etc. Made
with cotton, linen, hemp, hair etc. Also made by gluing two openweave, sized
cotton fabrics together. Usually white or plain collors. Also see Library
Buckram. 2. Originally a costly material from Bokhara, Southern Russia. Later,
a rich 16th Century English woollen fabric used for church vestments."
"A heavy flat duck or Osnaburg, stiff and durable starch filled or
pyroxylin treated and given a vellum, linen-like finish. Used especially on
library and reference books.
10. The Department in order to succeed in classifying the products of the respondents to fall under heading 59.01 of the Act will have to fulfil the following conditions:
1. That the fabric in question is a stiffened textile.
2. That the stiffness has to be durable and permanent in nature.
3. That the fabric is heavily sized.
11. It is the stand of the respondents that the stiffness as contemplated under
Chapter 59 has to be of permanent or durable nature as 'Buckram' is a fabric
which has a permanent stiffness. A fabric, which has undergone a process of
padding by applying natural starch on the side of the fabric, cannot be
classified as 'Buckram'. The tribunal has found that the fabric of the
respondents do not have permanent or durable stiffness which is essential for a
fabric to be classified as 'Buckram' in view of definition as understood
ordinarily and as is referred to in the authoritative text books. The report
given by the Chemical Examiner on which the Department has placed reliance
itself indicates the process undergone by the respondents' fabric is only that
of padding and does not show any stiffness of permanent nature.
12. When the several ingredients have to be satisfied, even if one ingredient
is not satisfied, namely, that the stiffness has to be of permanent and durable
nature, we do not think that the view taken by the tribunal calls for any
interference on our hands. In addition, we may notice that in none of the cases
presently involved, we have any heavily sized fabric. Therefore, that aspect
need not detain us.
13. In the circumstances, we do not think that these are fit cases where we
should remand the matter for fresh consideration on the question of heavily
sized fabric. We affirm the view taken by the tribunal and dismiss these
appeals.