Holding

The goods are not covered by Item 22; the residuary Item 68 applies.

Summary

The respondents, manufacturers of PVC conveyor belting, contended that the product should be classified under the residuary Item 68 of the Central Excise Tariff, while the Revenue argued it fell under Item 22 (man‑made fabrics). The Excise & Gold (Control) Appellate Tribunal found that PVC compounding was carried out simultaneously with weaving, resulting in a product with 56.7% PVC and no pre‑existing base fabric, and therefore held that Item 22 did not apply and Item 68 was appropriate. On appeal, the Supreme Court examined the definition of man‑made fabrics under Item 22 and accepted the Tribunal's factual finding that the manufacturing process constituted conversion from yarn to fabric with PVC coating at the same stage. Given the higher proportion of PVC, the Court concluded that the goods could not be treated as man‑made fabrics and affirmed the application of the residuary Item 68. Consequently, the appeals filed by the Collector of Central Excise were dismissed.

Issues considered

Whether PVC conveyor belting manufactured by the respondents falls within Item 22(3) (man‑made fabrics) of the Central Excise Tariff or is governed by the residuary Item 68 for the purpose of excise duty.

Legislation cited

Central Excise and Salt Act, 1944s. Section 3, s. Section 35-L(b)
Central Excise Tariff (First Schedule)s. Item 22, s. Item 68

Subjects

central excisetariff classificationman‑made fabricsPVC conveyor beltingresiduary entryexcise dutyItem 22Item 68

Judgment

COLLECTOR OF CENTRAL EXCISE, CALCUTTA
A v.
MULTIPLE FABRICS PVT. LTD. ETC.

APRIL 28, 1987

B [RANGANATH MISRA AND G.L. OZA, JJ.]

Central Excise and Salt Act, 1944-Section 3 and First Schedule
Item Nos. 22 and 68-P. V.C. Conveyor Belting-Whether 'man-made'
fabrics-Assessability to.excise duty-Falls under residuary Item No. 68. 4

The respondents, manufacturers of P. V.C. Conveyor Belting, -
C contended before the Customs, Excise and Gold (Control) Tribunal that J
for purposes of excise duty under the Central Excise Tariff this item fell
under Item 68. The Revenue submitted that the commodity was gover-
ned by Item 22. The Tribunal recorded a finding of fact that P.V.C. ~
compounding was done simultaneously with the weaving of the fabric
D 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
E 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]
-
F
In view of the higher percentage of P.V.C. Compound in the
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, the Tribunal was correct in holding that the goods were not
covered by Item. 22 and, therefore, the residuary Item 68 applied. [1228G]
G
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
H No. ED (SB) 1255/83-D.
1226

i'
C.C.E.v. MULTIPLE FABRICS (MISRA ,J.I 1227

Hemani Sharma, C.V. Subba Rao and K. Swamy for the
Appellant. A
~
R.N. Banerjee and K.J. John for the Respondents.

The Judgment of the Court was delivered by
8
RANGANATH MISRA, J. Each of these appeals under Section
t 35-L (b) of the Central Excise and Salt Act, 1944 is directed against the

- ,-
decision of the Customs, Excise and Gold (Control) Appellate Tri-
bunal. The short question arising in each of them is as to whether
P.V.C. Conveyor Belting manufactured 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 c
the Central Excise Tariff. According to the respondents the appro-
ll(
priate Item is 68 while according to the Revenue Item 22 squarely
covers the commodity. The Tribunal has accepted the stand of manu-
facturers. That is how all these appeals have been carried by the
Collector of Central Excise. D
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 E
Belting of width 10 c.ms. and thickness 9 m.m. It is com-
posed 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.
1 Compound= 56.7%". F

This position has not been disputed at any stage nor even before us.
The Tribunal has recorded a finding that P.V.C. compounding w_as
done simultaneously with the weaving of the fabric from yarn which
clearly indicated that the process ofmanufacture was conversion from Ci
• ~ 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
initially 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. H
1228 SUPREME COUR'f REPORTS [1987) 2 S.C.R.

It is not disputed that if the commodity would not be covered by
A Item 22, residuary Item 68 of '.:Oe Schedule would be applicable. Item
22 provides thus:-

"MAN-MADE FABRICS-
"Man-made fabrics" means all· varieties of fabrics manu·
B factured either wholly or partly from man-made fibres or
yarn and includes embroidery in the piece;· in strips or in
motil's, fabrics impregnated, coated or laminated with pre-
parations of cellulose derivatives or of other artifitial
plastic materials and fabrics covered partially or fully with
textile flocks or with preparations containing textile flocks,
in each of which man-made (i) cellulosic fibre <lt yam, or
c (ii) non-cellulosic fibre or yarn, predominates in weight:

Explanation I: "Base fabrics" means fabrics falling under
sub-item (1) of this Item Which are subjected to the process
D of embroidery or which are impregnated, ~oatetl or lami-
nated with preparations of cellulose derivatives or of other
plastic materials or which are covered partially or fully with
textile flocks or with preparations containing textile flocks.

Explanation II: ..................................... . +
E Explanation Ill: Explanation II under Item No. 19 shall,
so far as m!iy 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
F footing recorded by the Tribunal, it.is claimed that'there was no pre-
existing 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 com-
G modity, 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
t))at 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. ·
'H
N.P.V. Appeals dismissed.