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PETITIONER: COLLECTOR OF  CENTRAL EXCISE CALCUTTA

       Vs.

RESPONDENT: MULTIPLE FABRICS PVT. LTD. ETC."

DATE OF JUDGMENT28/04/1987

BENCH: MISRA RANGNATH BENCH: MISRA RANGNATH OZA, G.L. (J)

CITATION:  1987 SCR  (2)1226        1987 SCC  (2) 636  JT 1987 (2)   289        1987 SCALE  (1)1039

ACT:       Central Excise and Salt Act, 1944  Section 3 and  First Schedule Item NoS. 22 and 68--P.v.c. Conveyor Belting-Wheth- er  ’man-made fabrics--Assessability to  excise  duty--Falls under residuary Item No. 68.

HEADNOTE:     The respondents, manufacturers of P.V.C. Conveyor  Belt- ing, contended before the Customs, Excise and Gold (Control) Tribunal that for purposes of excise duty under the  Central Excise  Tariff  this item fell under Item  68.  The  Revenue submitted  that the commodity was governed by Item  22.  The Tribunal recorded a finding of fact that P.V.C.  compounding was done simultaneously with the weaving of the fabric  from yarn  and  held  that this item should be  governed  by  the residuary Entry 68 for the purposes of excise duty. Dismissing the appeals by the Revenue, the Court,     HELD:  It  is accepted that yarn is woven  into  fabric. Item  19 deals with cotton fabrics while Item 22 deals  with man-made  fabrics.  The  Tribunal recorded  a  finding  that P.V.C. compounding was done simultaneously with the  weaving of  the fabric from yarn, which clearly indicated  that  the process of manufacture was conversion from yarn to fabric as also  the application of the P.V.C. Compound carried  on  at the same point. [1228F; 1227FG]     In  view of the higher percentage of P.V.C. Compound  in the  commodity, it becomes difficult to treat  the  ultimate goods  as manmade fabrics for holding that it is covered  by Item  22.  Upon this analysis, the Tribunal was  correct  in holding  that  the goods were not covered by  Item  22  and, therefore, the residuary Item 68 applied. [ 1228G ]

JUDGMENT:     CIVIL  APPELLATE JURISDICTION:Civil Appeal No.  2089  of 1985. (with C.A. Nos. 99-100 of 1986 & 3340-46 of 1984).     From  the  Judgment and Order dated  24.11.1983  of  the Excise  &  Gold  (Control)  Appellate  Tribunal  in   Appeal No. ED (SB) 1255/83-D. 1227     Hemant  Sharma,  C.V.  Subba Rao and K.  Swamy  for  the

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Appellant. R.N. Banerjee and K.J. John for the Respondents. The Judgment of the Court was delivered by     RANGANATH MISRA, J. Each of these appeals under  Section 35-L (b) of the Central Excise and Salt Act, 1944 is direct- ed  against  the decision of the Customs,  Excise  and  Gold (Control) Appellate Tribunal. The short question arising  in each of them is as to whether P.V.C. Conveyor Belting  manu- factured by the different respondents in these appeals comes within the purview of Item 22(3) or would be governed by the residuary  entry  68 for purposes of excise duty  under  the Central  Excise  Tariff. According to  the  respondents  the appropriate  Item is 68 while according to the Revenue  Item 22 squarely covers the commodity. The Tribunal has  accepted the  stand of manufacturers. That is how all  these  appeals have been carried by the Collector of Central Excise.     The Assistant Collector who initiated the proceeding  in the  show cause notice reproduced the Departmental  Chemical Examiner’s Certificate. Therein it was stated:-               "The  sample  is in the form of  cut-piece  of               black  coloured Belting of width 10 c.ms.  and               thickness  9 m.m. It is composed of  synthetic               resin of P.V.C. type, reinforced with  textile               fabric  containing 42.3% by weight  of  cotton               and  rest viscose (man-made filament yarns  of               cellulosic  origin).  Percentage  of   textile               fabric = 43.3. Percentage of P.V.C. Compound =               56.7%". This  position has not been disputed at any stage  nor  even before  us. The Tribunal has recorded a finding that  P.V.C. compounding was done simultaneously with the weaving of  the fabric from yarn which clearly indicated that the process of manufacture  was conversion from yarn to fabric as also  the application  of the P.V.C. Compound carried on at  the  same point  of time. Learned counsel for the appellants who  ini- tially  attempted  to  challenge this  fact  was  ultimately obliged  to  accept the situation as a finding of  fact.  In fact before the Tribunal the departmental representative had relied upon this position as would appear from the  judgment of the Tribunal. 1228      It  is not disputed that if the commodity would not  be covered by item 22, residuary Item 68 of the Schedule  would be applicable. Item 22 provides thus:-               "MAN-MADE FABRICS--               "Man-made  fabrics"  means  all  varieties  of               fabrics  manufactured either wholly or  partly               from  man-made  fibres or  yarn  and  includes               embroidery  in the piece, in strips or in  mo-               tifs, fabrics impregnated, coated or laminated               with preparations of cellulose derivatives  or               of  other  artificial  plastic  materials  and               fabrics  covered partially or fully with  tex-               tile  flocks  or with  preparation  containing               textile flocks, in each of which man-made  (i)               cellulosic  fibre or yarn, or (ii)  non-cellu-               losic fibre or yaru, predominates in weight:                      Explanation  I:  "Base  fabrics"  means               fabrics failing under                      sub-item  (1)  of this Item  which  are               subjected  to  the process  of  embroidery  or               which  arc  imprignated’ coated  or  laminated               with preparations of cellulose derivatives  or               of  other plastic materials or which are  cov-               ered partially or fully with textile flocks or

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             with preparations containing textile flocks.               Explanation               II:  ......................................               Explanation III: Explanation II under Item No.               19 shall, so far as may be, apply in  relation               to this Item as it applies in relation to that               item."     It  is accepted that yarn is woven into fabric. Item  19 deals with cotton fabrics while Item 22 deals with  man-made fabrics.  On  the footing recorded by the  Tribunal,  it  is claimed  that there was no preexisting base fabric  and  the manufacturing process simultaneously brought into  existence the commodity by weaving yarn into fabric and application of P.V.C. Compound. In  view  of  the higher percentage of  P.V.C.  Compound  in commodity, it becomes difficult to treat the ultimate  goods as  man-made fabrics for holding that it is covered by  Item 22. Upon this analysis it follows that the Tribunal came  to the correct conclusion when it held that the goods were  not covered  by  Item 22 and, therefore, the residuary  item  68 applied.  All  these appeals are without any merit  and  are dismissed. Each of the respondents should be entitled to its costs. N.P.V.                                               Appeals dismissed. 1229