ORDER
S.L. Peeran, Member (J)
1. The Revenue is aggrieved with the order-in-appeal issued on 30-11-1990 passed by the learned Collector of Central Excise (Appeals), Ahmedabad rejecting the appeal filed by the Assistant Collector of Central Excise, Bulsar under Section 35E(4) of Central Excises and Salt Act, 1944.
2. The assessee had classified their product ‘Bleached sheetings of cotton fabrics’ under Heading No. 52.06 of the Schedule to Central Excise Tariff Act, 1985 under their various classification lists and cleared the product on concessional rate of duty under Notification No. 57/87-C dated 1-3-1987. As the product had a stiff finish and characteristics of Buckram falling under sub-heading 5901.10 of CET ’85 as reported by the Chemical Examiner in his test report, a demand notice dated 24-4-1988 was issued against the respondents demanding differential duty amounting to Rs. 28,60,251.51 P. for the period from September 1987 to January 1988. This demand was subsequently revised to Rs. 25,51,768 vide corrigendum dated 22-3-1988. The assessee had asked for retest by the Chemical Examiner, who reported that the product may not fall under Chapter 59, though it appeared like Buckram and other similar stiffened fabrics due to heavy sizing. The Assistant Collector on the basis of this report, dropped the proceedings. However, the Revenue went in appeal before the Collector (Appeals). On the ground that the product in question should be classified under Heading 59.01 due to the following reasons –
(i) 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;
(ii) 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 (e.g. starch) which is used for book binding, but also such cloth with other end-uses, would get cover under this heading.
(iii) order-in-original is not a speaking order and does not discuss the merits of the case.
3. The Assessee before the learned Collector, has relied on the Board’s instructions dated 19-4-1980 and 27-7-1980 wherein it had been clarified that such cotton fabrics continued to remain porous even after processing. As such, the product would not be liable for classification as coated or impregnated fabrics. The Board by their latest instructions dated 2nd September, 1988 had again 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. The coated fabrics have been defined therein as textile fabrics on which there has been formed institution one or both surfaces a layer or layers firmly adherent coating materials. The assessee also relied on the letter issued to them 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. The learned Collector after examining these materials held that the product is correctly classifiable under Chapter 52.
4. Before us, the Revenue has taken the ground 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. 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 59.01 since the general heading would not be preferable to the more specific entry. This Heading No. 59.01 is specific for stiffened type of fabrics and it would over-rule the general heading of processed fabrics falling under sub-heading 5206. Moreover, the book binding cloth would be covered by the expression ‘Buckram’ and similar textile fabrics of sub-heading 5901. It is further pleaded that Explanatory Note to Chapter 59.01 make it clear that not only that cloth so prepared which is used for book binding but also cloth which has other end-uses, would get covered by subheading 59.01 as this is indicated by the expression ‘of a kind used for outer cover of books or the like’ covering under sub-heading 59.01.
5. We have heard Smt. JMS Sundaram, learned DR for the Revenue and Shri V. Lakshmi Kumaran, learned Counsel for the assessee. The learned DR has argued her case and has taken lot of pains to produce technical literature and definitions appearing in Fairchild’s Dictionary of Textiles, Sixth Edition, by Dr. Isabel B. Wingate; extract from Encyclopaedia of Textiles, Third Edition by the Editors of American Fabrics and Fashions Magazine. She has also relied on extracts from Technology of Textile Processing, Volume X, Technology of Finishing by Prof. V.A. Shenai and Dr. Naresh M. Saraf, published by Sevak Publications, Bombay. She has also produced extracts from Modern Textiles by Dorothy Siegert Lyle. She has also referred to the Explanatory Notes to heading 5901 in respect of Sr. No. 4 which refers to Buckram and similar stiffened textile fabrics of a kind used for hat foundations :-
“These are stiffened textile fabrics made by impregnating lightweight open textile fabrics with adhesives and fillers (e.g. with glue or amylaceous substances mixed with kaolin). Certain varieties of Buckram or similar fabrics are made by pasting together two such stiffened fabrics. These fabrics are used mainly in the manufacture of the hat foundations of Heading 65.07.”
Referring to the definition of the term ‘Buckram’ appearing at page 87 and Library Buckram, appearing at page 350 of Fairchild’s Dictionary of Textiles are as follows :-
“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.”
The learned SDR argued that the product having been treated with Starch wetting and fillers like China Clay, it qualifies to be called as ‘Buckram’ and, therefore, its classification under chapter 59 has to be upheld. She pointed out that the Board had clarified about the item to be classified under the erstwhile Tariff and that clarification is not binding. She submitted that the item is sold as a lining material and it is used in the manufacture of hats as stiffner. Referring to the Test Memos, she argued that the test Memo had referred to the item as having stiff finish, bleach fabrics, heavily sized and also there was an opinion that it appeared like Buckram. However, the test result had clarified that the product cannot be considered as coated fabrics and may not be under subheading 5902. She argued that merely because it is not coated, it will not by itself go out of Chapter 59. She argued that coating and sizing had certain similarities. She further argued that Buckram need not be permanently sized. The fabric can remain porous in nature and interstice need not be filled up. In this context, she relied on the technical literature available from the book ‘Technology of Textile Processing’. She argued that the book binding cloth is not immersed in water and it is also not washed. It is made stiff for binding. She also referred to the extracts from the book ‘Modern Textile’ wherein it had been stated that Buckram need not have permanent stiffening. She also referred to the extract from the book ‘American Fabrics’. She pointed to the various Board’s clarifications and contended that the said clarifications are not helpful to the assessee and hence, the Board’s clarification should be discarded.
6. The learned Advocate, at the outset, submitted that the appeal is not maintainable as the department had not taken the ground that the goods are Buckram but had proceeded on the ground that they are coated fabrics requiring classification under Heading 59.01. The department had not raised this ground before the Collector (Appeals) and, therefore, it was not open to the department to raise the same in this appeal. He referred to Section 35E(2) of the Act and pointed out that even as per the provisions of this section, the Revenue has to confine themselves to the ground initiated initially. He pointed out to the impugned order and argued that the learned Collector had confined himself to the aspect of the product being a coated fabrics or not and there was no discussion or reference to the product being a Buckram. He also pointed out to the Test Memo dated 13-10-1987 by which the Chemical Examiner had stated that the product is made of cotton fabric heavily sized with starch and inorganic filler and it has the characteristics of Buckram. He pointed out that there was no clearcut findings of the Chemical Examiner. He contended that the Revenue before the Collector had only raised a question for decision as to whether the product is a coated fabric. He was not asked to decide as to whether the product is a Buckram or not. He contended that under Section 35E while exercising power, the Collector cannot proceed beyond the scope of the reference made for decision before the First Appellate Authority namely, Collector (Appeals). Therefore, he submitted that the question of product being buckram, cannot be raised at this stage before the Tribunal. In this context, he relied on the ruling rendered in the case of S.R. Gujrat Ltd. v. C.C.E., Ahmedabad as rendered in Order No. 120-121/91-D, dated 13-2-1991. In this cited case, the reference was with regard to Section 129D and the Tribunal had held the scope under the said section is limited and did not allow the party to raise additional point, not taken up at an earlier stage. He contended that the question of even raising additional grounds at this stage, does not arise as the Collector has become functus officio as the scope in this case is not that of an appeal. He contended that once the question has been framed at the first stage, the officer become functus officio and the scope for reference is narrow, whereas in appeal, the scope is quite wide and other grounds could be raised. In this context, he further relied on the following rulings –
(a) Chormal Chand v. State of Madhya Pradesh – [AIR 1966 MP 20 FB]
(b) Collector of Central Excise v. Wander India Ltd. – [1990 (25) ECC 315,61, 63]
(c) Collector of Central Excise v. Oswal Vanaspati & Allied Industries – [1989 (42) E.L.T. 3]
(d) Commissioner of Income-tax v. Jagadhari Electric Supply Company Ltd. – [1983 (140) ITR 490]
He contended that the products in the erstwhile tariff was considered as bleached cotton fabrics and classified under TI 19(1) and not under TI 19(3) as coated fabrics. After 1986, the Board had accepted the classification of the product as a bleached cotton fabrics under sub-heading 52.06 of Central Excise Tariff, 1985. He also pointed out that the test reports were not specific and the Assistant Collector had accepted the various Board’s circulars on this aspect of the matter. The learned advocate argued extensively on the Board’s circular and its effects. He also pointed out at great length as to how the product was considered in the Textile Industry and in this context, he referred to several notifications and citations. He also pointed out that the process carried out by the party did not amount to manufacture and the cotton fabrics continue to remain cotton fabrics. He drew his strength on the basis of a large number of earlier decisions and the notifications which were issued in this context. He pointed out that the product in question was not permanently stiffened. The starch which was coated on the cotton fabrics did not give permanent stiffening and it was temporary in nature so much so that mere dipping in water could immediately dissolve the starch. The various arguments put forth by the learned advocate on the manner in which the products were considered as stiffened ones in the textile industry, has been noted by us, but it does not require more elaboration here. Further, he has also relied on the technical literature to show that the product is not a buckram at all as buckram referred to permanently stiffened fabric as can be seen even from the technical literature relied by the learned DR. He pointed out that once the interstics of cotton fabrics were filled and treated with gum, then alone it would come under Chapter 59. In this case, the item is porous padded and the interstics are not filled and, therefore, the product cannot go under Chapter 59 at all. On this contention that the product is not a stiffened fabric, he relied on the ruling rendered in the case of Commissioner of Sales Tax v. Ashoka Dairy [1983 (53) STC 231], Hindustan Aluminium Corp. v. State of U.P. [1981 (48) STC 411 SC], Pratap Rajasthan Copper Foils & Laminates Ltd. v. Collector of Central Excise [1989 (44) E.L.T. 775], Raletronics Ltd. v. Collector of Central Excise [1992 (60) E.L.T. 388]. The learned DR submitted that the Assistant Collector had dropped the proceedings on the ground that it is not a coated fabric and this finding had been challenged. Therefore, it followed that the question in full has been referred to the Tribunal. This point was for consideration before the Collector (Appeals) and the same point is also before us. She reiterated her earlier arguments that the product had the characteristics of Buckram and it is a stiffened textile fabric and its classification under Chapter 59 has to be upheld. She also pointed out that the end-use of the product can be taken into consideration for the purpose of classification.
7. We have carefully considered the submissions made by both the sides and have perused the records. The learned advocate has raised a preliminary point inasmuch as the grounds raised by the Revenue were not the points for determination before the Collector (Appeals) and as both the authorities have not gone into the same, it cannot be agitated before this Tribunal under Section 35E(1) and (2) of the Act. The Sub-section 35E(1) and (2) of the Central Excises and Salt Act, 1944 are as follows –
“The Board may, of its own motion, call for and examine the record of any proceeding in which a Collector of Central Excise as an adjudicating authority has passed any decision or order under this Act for the purpose of satisfying itself as to the legality or propriety of any such decision or order and may, by order, direct such authority to apply to the Collector (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Collector of Central Excise in his order.
The Collector of Central Excise may, of his own motion, call for and examine the record of any proceeding in which an adjudicating authority subordinate to him has passed any decision or order under this Act for the purpose of satisfying himself as to the legality or propriety of any such decision or order and may, by order, direct such authority to apply to the Collector (Appeals) for determination of such points arising out of the decision or order as may be specified by the Collector of Central Excise in his order.”
As can be seen from Sub-section (2), the Collector may direct such authority to apply to Collector (Appeals) for determination of such points arising out of the decision or order as may be specified by the Collector of Central Excise in his order. As we have reproduced above, before the Collector (Appeals) there was no reference to the product being a Buckram. The points which had been raised before the Collector (Appeals), have already been extracted (supra). The first point was that the goods were to be classified as it specified the specific description of Heading 59.01 viz. Textile fabrics coated with gum or amylaceous substance of a kind used for outer cover of book or the like is satisfied in this case. The second point was the Explanatory note to HSN. The third point was that the order-in-original is not a speaking order and does not discuss the merits of the case.
8. As per Section 35E(1), the Board has to direct such authority the Collector to apply to the Tribunal for the determination of such points arising out of the decision or order as may be specified by the Board in its order. The ground taken before us is that the book binding cloth should be covered by the expression Buckram and similar textile fabric of Heading 59.01. As noted by us from the reference made to the Collector (Appeals), this issue was not referred for determination and this point also does not arise from the order of the Collector (Appeals). As can be seen from the order-in-appeal, there was no reference to the product being a Buckram and as a consequence, there is no finding and as such, this point will not arise for determination as the same has not arisen out of the order of Collector (Appeals). Therefore, the contention raised by the advocate in this regard is tenable and has to be upheld.
9. The learned Advocate has relied on certain citations in support of this contention. We will first examine the Tribunal judgments before diverting to the rulings rendered under the Sales-tax and Income-tax Act. In the case of Collector of Central Excise v. Wander India Ltd. (supra) the observations made by the Tribunal in paras 61 to 64 are reproduced below which are appropriate to the facts of the present case and can be applied :-
“Thus from the above, it is clear that the Collector of Central Excise in exercise of his powers conferred upon him under Sub-section (2) of Section 35E of the Act (which specially provides that the Collector of Central Excise may after examining the record of any proceeding in which an adjudication order is passed by any authority subordinate to him, by order direct the authorised authority to apply to the Collector (Appeals) for the determination of such points arising out of the such order as may be specified by him) directed the Assistant Collector to file the appeal to the Collector (Appeals) for determination of the only point as to whether the Ascorbic Acid used by the appellants in the manufacture of Reclor Capsules and Resteclin Capsules and tablets could be considered as ‘Therapeutically inert’. Accordingly, the appeal was filed by the Assistant Collector with respect to the products in question namely Reclor capsules Resteclin capsules and tablets. The same was allowed by the Collector (Appeals) vide his common impugned order dated 3-9-1986. From this impugned order so passed it is also clear that the only issue which was involved in the appeal with respect to the disputed products namely Reclor capsules and Resteclin capsules and tablets was as to whether the ascorbic acid used by the appellants in the manufacture of the said products could be considered as Therapeutically inert or not and he [Collector (Appeals)] while dealing with this question agreed with the view expressed in the authorisation letter issued by the Collector to the Assistant Collector to file appeals. The said discussion of the Collector (Appeals) in the impugned order runs as follows –
As regards the remaining products viz. Reclor Capsules, Resteclin capsules and Resteclin tablets, the grounds for filing EA 2 application as mentioned in the authorisation letter issued by the Collector are that in the manufacture of these products, ascorbic acid has been used as other ingredients amongst others and for availing of the exemption under Notification No. 116/69 dated 3-5-1969, the condition stipulated that the other ingredient or ingredients should be therapeutically inert and do not interfere with therapeutic or prophylactic activity of the ingredient or ingredients specified in the Schedule to the notification is required to be satisfied. The ascorbic acid is not therepeutically inert. The use and antibiotic action of ascorbic acid has been indicated at page No. 1655 of the book entitled ‘Martingale – the extra Pharmacopoeia’ 28th Edition. Further the opinion of the Assistant Director Foods and Drugs Control Admn., Baroda is with reference to disease and not with reference to the active ingredient and the certificates cannot be considered as authentic. It is also stated in the said authorisation letter that Notification No. 116/69 does not provide any restricted sense in respect of inertness as such ascorbic acid used as other ingredient in all the medicines in question are not therapeutically inert and the certificates also does not give any opinion about the other ingredients which also cannot be considered as inert ingredients and that the Deputy Chief Chemist has categorically stated that these products will not be covered by exemption Notification No. 116/69 and therefore these medicines are not eligible for exemption. I agree with the view expressed in the authorisation letter (Emphasis supplied).
62. Thus from a resume of the facts narrated above, it is clear that the Assistant Collector who adjudicated the case vide his order dated 12-1-1983, allowed the claim of the appellants to the concessional rate of duty in terms of Notification No. 116/69 with respect to the Reclor capsules, Resteclin capsules and tablets and after agreeing with the appellants that the addition of Ascorbic acid in the manufacture of the aforesaid capsules and tablets was a pharmaceutical necessity and the Ascorbic acid is therapeutically inert and does not interfere with the therapeutic or prophylactic activity of the main ingredients and that the Collector of Central Excise in terms of Sub-section (2) of Section 35E of the Act directed the Assistant Collector to file appeal to the Collector (Appeals) for determination of the only point as to whether the ascorbic acid used in the manufacture of capsules and tablets in question is therapeutically inert or not as in the manufacture of capsules and tablets in question is therapeutically inert or not as in his opinion, the use of Ascorbic acid was not therapeutically inert and this issue (point) on appeal was decided in favour of the department.
63. It deserves to be mentioned here that the department has not filed any Cross Appeal or Cross objections before us on the question that the addition of Ascorbic Acid in Reclor Capsules, Resteclin Capsules and Tablets was not a pharmaceutical necessity and obviously because the matter ended when the Collector of Central Excise (Appeals) did not refer this question for determination in his order passed under Sub-section (2) of Section 35E of the Act directing the Assistant Collector to file the appeal. Likewise, the Collector (Appeals) also acted in accordance with law while passing the impugned order confining himself only to the ground taken up in the authorisation of the Collector and in my opinion rightly so because the appeal had to be confined to the ground(s) specified by the Collector in his authorisation. See the case of CCE v. Oswal Vanaspati & Allied Industries [1989 (42) E.L.T. 3] wherein the authorisation of the Collector was confined to only one ground but the Assistant Collector in his appeal before the Tribunal had taken among other grounds including those on merits and on an objection by the respondent therein that it was not permissible for the Assistant Collector to go beyond the authorisation, the Tribunal while sustaining the objection held that ‘appeal has to be confined to only one ground of principles of natural justice taken by the Collector in his authorisation’.
64. Thus in the teeth of these indisputable facts the question that the addition of Ascorbic acid in the manufacture or Reclor Capsules, Resteclin Capsules and tablets was a Pharmaceutical necessity is a concluded question in favour of the appellants and neither the department has a right to raise the said concluded question nor the Tribunal is required to re-examine the said question afresh in the absence of any challenge. In this background, I am of the considered view that it was neither necessary for the majority nor for my learned Brother Shri V.P. Gulati to examine the said concluded question in this appeal and since the only issue which arose for our consideration in the instant Appeal No. E/2173/86-C filed by M/s. Sarabhai Chemicals is that as to whether the addition of Ascorbic Acid in the manufacture of Reclor Capsules, Resteclin Capsules and tablets was therapeutically inert stands concluded by the majority with which I fully agree in favour of the appellants, and since my learned Brother Shri V.P. Gulati has not recorded any contrary opinion on this issue, the said Appeal No. E/2173/86-C also deserves to be allowed.”
10. In the case of Commissioner of Income-tax, Patiala v. Jagadhari Electric Supply and Industrial Company, a similar question arose for consideration. Section 263 of the Income-tax Act is identically worded as Section 35E of the Central Excises and Salt Act, 1944. The Hon’ble High Court has held at page 502 that the Tribunal cannot substitute remarks which did not form part of the order of Commissioner. the observations made by Hon’ble High Court at pages 502-503 are reproduced below –
“The jurisdiction vested in the Commissioner under Section 263(1) of the Act is of a special nature or in other words, the Commissioner has the exclusive jurisdiction under the Act to revise the order of the ITO if he considers that any order passed by him was erroneous in so far as it was prejudicial to the interests of the Revenue. Before doing so, he is also required to give an opportunity of being heard to the assessee. If after hearing the assessee in pursuance of the notice issued by him under Section 263(1) of the Act, he is not satisfied, he may pass the necessary orders. Of course, the order thus passed will contain the grounds for holding the order of the ITO to be erroneous, as contemplated under Section 263(1) of the Act. Feeling aggrieved therefrom the assessee may file an appeal against the same, as provided under Section 253(l)(c) of the Act. In the memorandum of appeal, the assessee is supposed to attack the order of the Commissioner and to challenge the grounds for decision given by him in his order. At the time of the hearing, if the assessee can satisfy the Tribunal that the grounds for decision given in the order by the Commissioner are wrong on facts or are not tenable in law, the Tribunal has no option, but to accept the appeal and to set aside the order of the Commissioner. The Tribunal cannot uphold the order of the Commissioner on any other ground which, in its opinion, was available to the Commissioner as well. If the Tribunal is allowed to find out the ground available to the Commissioner to pass an order under Section 263(1) of the Act, then it will amount to a sharing of the exclusive jurisdiction vested in the Commissioner, which is not warranted under the Act. It is all the more so, because the Revenue has not been given any right of appeal under the Act against an order of the Commissioner under Section 263(1) of the Act. In case he proceeds thereunder after hearing the assessee in pursuance of the notice given by him, then the appeal filed by the assessee under Section 253(l)(c) of the Act cannot be treated on the same footing as an appeal against the order of the AAC passed in assessment proceedings, where both the parties have been given the right of appeal. In this view of the matter, the argument raised on behalf of the Revenue, that in appeal, the Tribunal may uphold the order appealed against on the grounds other than those taken by the Commissioner in his order, is not tenable. Under Section 263 of the Act it is only the Commissioner who has been authorised to proceed in the matter and, therefore, it is his satisfaction according to which he may pass necessary orders thereunder in accordance with law. If the grounds which were available to him at the time of the passing of the order do not find a mention in his order appealed against, then it will be deemed that he rejected those grounds for the purpose of any action under Section 263(1) of the Act. In this situation, the Tribunal, while hearing an appeal filed by the assessee, cannot substitute the grounds which the Commissioner himself did not think proper to form the basis of his order.”
11. In the case of State of Tamilnadu v. Seimens Engineering & Manufacturing Co. (India) Ltd., [1977 (39) STC 285] a similar contention had been raised and the Hon’ble Madras High Court has answered the same in respect of the provisions of Tamilnadu General Sales-tax Act, 1959. We find that the provisions of the section have not been stated clearly in the ruling and as such, we may not be in a position to apply in toto this ruling. However, taking into consideration the rulings rendered by this Tribunal in the case of C.C.E. v. Wander India Ltd. and that of Commissioner of Income-tax v. Jagadhari Electric Supply Co. and also the findings given by us, we uphold the contention of the learned advocate and the appeal has to be rejected on this ground alone.
12. As regards the contention on merits is concerned, the learned DR has taken pains and has argued to show that the product is a Buckram and it requires to be classified under Chapter 59 of the Central Excise Tariff Act, 1985. She has lend support from the dictionary meaning and the technical literature. It is well settled that the dictionary meaning and technical literature has to be resorted to only after finding out as to how the product is known in the market. The burden of the classification is squarely on the Department. The Department has not placed any evidence in their support that the product is a Buckram and it requires to be classified under Chapter 59. The Revenue is heavily relying on Explanatory Note 4 to Chapter 5901 which has been extracted above. The Explanatory note clearly 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 falling under this heading. There is a note that fabric for similar use impregnated or coated with plastics are excluded under Heading 59.03. There is also a note that the heading does not cover the products described in paragraphs (1), (2), (4) above when made up as described in Part II of the General Explanatory note to Section XL A reading of the entire Note 59.01 indicates 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.
13. Now the question is as to whether the product in question satisfies the specifications as stated in the sub-heading. The definition of Buckram and library Buckram has been given (supra). The definition of sizing, impregnated fabric given in Fairchild’s Dictionary of Textiles at page 87 states as follows –
“Sizing”:
“A generic term for compounds which when applied to yarn or fabric form a more or less continuous solid film around the yarn and individual fibres. In general, additional smoothness, abrasion resistence, stiffness, strength, weight or luster are acquired. Starch, gelatin, oil, wax or any other suitable compound is employed. Synonyms – Dressing, size, 2. The process of applying sizing compounds 3. Process of weighting sample lengths of yarn to determine the count.
Impregnated Fabric – a fabric in which the interstics between the yarn are completely filled with an impregnating compound throughout the thickness of the material, as distinguished from sized or coated materials where the material is applied to the surface and these interstics are not completely filled ASTM.”
As can be seen from these definitions, 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 (supra) 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’s report does not refer to these definitions at all. The chemical examiner has clearly stated in his test report, which has been supplied by the Superintendent, vide his letter dated 24-3-1987, that “the sample is in the form of loosely woven up stiffy finished cotton fabric. It has the characteristics of buckram”. The report dated 26-5-1988 of the chemical test also indicates –
“Each of the 8 samples are in the form of open woven bleached cotton fabrics sized with starch. Each is somewhat showdy. On treatment with hot water, each looses of stiffness. The interstics between the yarn 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 filed in this case. Admittedly in this case, 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 SDR from the technical books, clearly indicates that the sizing have to be heavy and the interstics have to be filled and the stiffness has to be permanent. The test results reproduced above does not support the department’s case and also there is no specific finding that the material is a Buckram. Another thing that can be noted is that there has been a clear justification in the test results that the item is not classifiable under Heading 59. This cannot be lost sight of. We have seen the entire technical literature and the reading of this does not support the department’s claim.
14. We have gone through the entire Board’s instructions in this matter. The Tariff Advice No. 36.84 dated 27th July 1984, issued to all the Collectors, there is a clarification that the Chief Chemist has also opined that the object of exemption (i.e. Notification 88/76-C.E. as amended) 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. Para 8 states –
“In view of the above facts, it is decided that padding solution containing ingredients like small amount of optical whitening agent, wetting agent, fatty matter and fillers like China Clay would also be covered by the term ‘padding’ referred to at Sl. No. 11 under the erstwhile Notification No. 80/76, dated 16th March, 1976 (and presently Notification No. 253/82, dated 8th November, 1982).
15. The Under Secretary to Government of India, by his letter dated 7th December, 1989 to the assessee, had intimated that the classification of bleached and cotton fabrics conform to the Chemical Examiner’s report and that they merit classification under Chapter 52 and that the Collector of Central Excise, Baroda, has been suitably informed accordingly. In view of this understanding of the Government as well as the technical points we have noted. We do not see any case in favour of the department. It has also been pointed out to us that in the erstwhile tariff, the product had been classified under TI 19(1) which correspond to Chapter 52 of the new Tariff. The Departmental Representative has not given any convincing answer to this aspect of the matter but only contended that the Board’s circular and Government of India’s letter is not binding. In these peculiar circumstances of this case, we do not find the contention of the learned DR to be tenable and in the result, we do not find any merit in the appeal and the same is rejected.