Customs, Excise and Gold Tribunal - Delhi
United Felt Carpets vs Collector Of Central Excise on 6 January, 1995
Equivalent citations: 1995ECR545(TRI.-DELHI), 1995(76)ELT415(TRI-DEL)
ORDER P.K. Kapoor, Member (T)
1. This is an appeal against the Order dated 22nd March, 1991 passed by the Collector of Central Excise (Appeals), New Delhi. The appellants are engaged in the manufacture of non-woven felt fabric having the code names FFBW-1, FFB-1 and FFB-2. The FFBW-1 variety is a non-woven felt fabric made by needle punching of layers or web of polypropylene fibres on the top surface and other synthetic fibre on the other side of a reinforcing fabric such as hessian cloth. The FFB-1 variety is also a non-woven felt fabric made by needle punching of layers of polypor-pylene fibres placed on hessian cloth to act as a reinforcement. This kind of felt fabric is subjected to calendering after needle punching. The FFB-2 is also a similar non-woven felt fabrics made by needle punching of layers of polypropylene fibres placed on reinforcement of hessian cloth, and calendering it after spraying the underside with chemical binder. In the classification lists filed from time to time the appellants claimed the classification of these non-woven felt fabrics as 'Man-made Fabrics' under Tariff Item 22(l)(a) or 22(l)(b). On the advice of the department the appellants classified the goods under Tariff Item 22G which covered "Floor coverings, namely, carpets, carpetings and rugs (made up or not)". Thereafter, by a letter dated 3-10-1985 the appellants were informed that it was proposed to finally approve the classification of the fabrics in question under Tariff Item 22G. The appellants contended that non-woven felt fabrics manufactured by them were not classifiable under Tariff Item 22G since in the absence of any backing or supporting material they could not be deemed as "Carpets" or "Carpeting". However, by his Order dated 22-11-1985 the Assistant Collector held that the non-woven fabrics in question were classifiable under Tariff Item 22G. Based on the order passed by the Assistant Collector, the Suptd. of Central Excise demanded a sum of Rs. 28,03,082.27 from the appellants. Being aggrieved by the order passed by the Assistant Collector, the appellants preferred an appeal before the Collector of Central Excise (Appeals), who by the impugned order confirmed the findings of the Assistant Collector.
2. On behalf of the appellants Shri V. Lakshmi Kumaran, Ld. Advocate appeared before us. He submitted that the Collector (Appeals) order holding that the disputed goods could not be deemed as fabrics falling under Tariff Item 22(l)(a) or 22(l)(b) is erroneous since the goods being non-woven felts, were covered by Tariff Item 22. In support of his contention he cited the judgment of the Supreme Court in the case of Poritts and Spencer (Asia) Ltd. v. State of Haryana, reported in 1983 (13) E.L.T. 1607 (SC). He added that the Collector (Appeals) order holding that the disputed non-woven felt materials having code names FFBW-1, FFB-1, FFB-2 as classifiable under Tariff Item 22G, which covers carpet, carpeting and rugs is also not sustainable. He stated that the goods in question were admittedly not rugs and they were also not floor coverings such as carpets and carpeting since they were meant for use in the front and back portions of maruti cars and vans whereas carpet or carpeting is used for laying on the floor. He submitted that needle-loom carpeting requires further strengthening by sizing the underside of the basic fabric with a rubber, polyurethane or polymer composition so that it penetrates to some extent through the fabric and imparts the necessary strength and firmness. He added that according to the "Standard Handbook of Textiles" by A.J. Hall in the manufacture of needle-loom carpets a thick layer or web of loose fibres laid on a hessian base in subjected to punching or downward movement of the needles of the loom resulting in the fibres getting anchored to the base fabric and on account of the anchorage of fibre tufts at this stage being less than in the case of woven carpets, it is important to further strengthen such basic fabrics by sizing the under-side with a rubber, polyurethane or polymer composition. In this regard he also referred to the letter dated 15-2-1991 from the Bombay Textile Research Association who after testing of the samples of the materials had opined that FFB-1, & FFB-2 were needle punched non-woven felts with FFB-1 having one side calendered and FFB-2 having one side treated with chemical binder and FFBW-1 was only a reinforced needle punched non-woven felt with a back layer of waste fibres. The Ld. counsel for the appellants further submitted that in terms of Explanation II to Tariff Item 22G a product could be classified as carpet or carpeting only if it has the characteristics of floor coverings. He contended that the disputed goods could not be deemed as having the characteristics of carpet as they did not have the backing of any rubber or polyurethane or polymer composition which has necessarily to be provided to non-woven felts for conversion into 'Carpeting'. He stated that in the appellants' own case in Order No. E/353/93-D, dated 15-10-1993 the Tribunal has held that needle-loom non-woven felt which is not reinforced by rubberis-ing or latexing as classifiable only as felt under Heading 56.02 on the grounds that it could not be deemed as goods having acquired as essential characteristics of floor coverings falling under sub-headings 5702.20 and 5702.90 of the Central Excise Tariff.
3. On behalf of the respondents Shri Satish Shah Ld. JDR stated that as held by the Supreme Court in the case of M/s. Novopan India Ltd. v. Collector of Central Excise & Customs, Hyderabad, reported in 1994 (73) E.L.T. 769 (SC), commercial understanding of an item and not its scientific or technical description has to determine its classification. He added that material in question was admittedly being used by the automobile industry as floor covering. He contended that having regard to the use of the disputed material on account of the fact that on inspection the Collector (Appeals) had found that the products FFB-1 and FFB-2 had synthetic backing and FFBW-1 was sufficiently thick having a soft layer backed by a second layer, they have to be deemed as having acquired the characteristics of floor coverings. He argued that under these circumstances in terms of Explanation I and II of Tariff Item 22G, the goods in question were correctly held as classifiable under that Item. He contended that the Order No. E/353/93-D, dated 15-10-1993 on which the appellants had placed reliance was not relevant since in that case the classification of the products in question was decided having regard to the relevant notes to Chapters 56 and 57 and the wordings of sub-headings 5702.20,5702.90 and 56.02 of the Schedule to the Central Excise Tariff Act, 1985.
4. We have examined the records of the case and considered the submissions made on behalf of both sides. It is seen that only the following questions arise for consideration in this case :-
(i) whether the disputed non-woven felt fabric bearing code names FFB-1, FFB-2 and FFBW-1 could be deemed as 'Man-made fabric' falling under Tariff Item No. 22 of the erstwhile Central Excise Tariff.
(ii) whether the disputed items of non-woven felt fabric could be deemed as Floor covering, namely 'carpet or carpeting' falling under Item 22G of the Tariff.
5. For the proper appreciation of the rival contentions we refer to Items 22(l)(a), 22(l)(b) and 22G of the Central Excise Tariff which are reproduced below:-
* * * * * * * * * * 5A. Taking up the first point we find that in arriving at his finding that the non-woven felt in question could not be deemed as 'man-made fabric' falling under Tariff Item 22(l)(a) or 22(l)(b) the Collector (Appeals) has relied upon the judgment of the Supreme Court in the case of Union of India v. Gujarat Woollen Felt Mills, [1977 (1) E.L.T. (J 24)]. It is seen that in the said judgment the Supreme Court ruled out the classification of non-woven felt under Entry 21 of the relevant Central Excise Tariff on the consideration that specific mention of woven materials such as blankets, rugs and shawls suggested that the word 'Fabrics' in Entry 21 had been used to mean woven material in the sense in which it is popularly understood. In this regard we find that in a later judgment in the case of Poritts and Spencer (Asia) Ltd. v. State of Haryana, reported in 1983 (13) E.L.T. 1607 (SC), the Supreme Court had, while holding that 'Dryer felts' are 'textiles' classifiable under Item 30, Schedule 'B' to the Punjab General Sales Tax Act, 1948 observed that there has been such phenomenal advance in science and technology and so many new techniques have been invented for making fabric out of yarn that it would be most unwise to confine the weaving process to warp and woof pattern and whatever the mode of weaving employed woven fabric would be 'textiles'. The Court further observed that it must be remembered that the concept of 'textiles' is not a static concept and having regard to newly developing materials, methods, techniques and processes, a continually expanding content and new kinds of fabrics may be invented which may be legitimately, without doing any violence to the language be regarded as textiles. Paras 6 and 7 of the said judgment are reproduced below :-
On the ratio of the judgment of the Supreme Court extracted above, we hold that the finding in the impugned order that non-woven felt bearing code names FFB-1, FFB-2, and FFBW-1 cannot be deemed as 'Man-fnade fabrics' is not sustainable.
6. The next point to be examined is whether the disputed items of non-woven felt could be deemed as 'Floor-coverings', namely 'carpet or carpeting' falling under Item 22G of the Central Excise Tariff. In this regard the appellants' case is that the disputed products cannot be deemed as 'floor covering' since they are used in the front and back portions of maruti cars and vans, whereas carpet or carpeting is used for laying on the floor. They have contended that in needle-loom carpeting made by punching layers or web of propylene fibres laid on a reinforcing fabrics such as hessian cloth, the fibres not firmly bonded require further strengthening by sizing the underside of the basic fabric with a rubber, polyurethane or polymer composition, which after penetrating the basic fabric imparts the necessary strength and firmness. It has been argued that in terms of Explanation II carpeting covered by Tariff Item 22G includes carpeting having characteristics of carpeting the disputed non-woven felts not having undergone any further processing by treatment of the base fabric with any rubber, polyurethane or polymer composition could not be deemed to have acquired the essential characteristics of floor coverings. In support of their contention that the disputed item of non-woven fabrics cannot be deemed to have acquired the characteristics of floor coverings, the appellants have placed reliance on the following extract from the "Standard Handbook of Textiles" by A.J. Hall :-
"For the manufacture of needle-loom carpets a machine is used which comprises rows of vertical needles each having a barb. These are positioned over a hessian base fabric on which is laid a suitably thick layer or web of loose fibres, and as this moves forward the needles are caused to punch their way downwards through the fibres and the fabric underneath and then return. The barb on each needle moving through the web collects and carries a tuft of fibres downward to become anchored in the base fabric. Since the anchorage of the fibre tufts at this stage is less than in the case of woven carpets, it is important that it should be further strengthened by sizing the under-side of the base fabric with a rubber, polyurethane or other polymer composition and it is desirable for this to penetrate slightly through the fabric so as to give increased solidity and firmness of the resulting needle-loom carpet."
7. It is an admitted fact that the disputed non-woven felt products bearing code names FFB-1, FFB-2 and FFBW-1 are used as floor coverings in the front and back of Maruti cars and vans and for covering the rear portion of the back seat of Maruti car and van. Read with Explanation II, Item No. 22G of the relevant Central Excise Tariff also covers carpeting having the characteristics of floor covering but intended for use for any other purpose. Hence, the disputed items of non-woven felt would be classifiable under Item 22G if they can be deemed to have acquired characteristics of floor coverings. According to the "Standard Handbook of Textiles" by A.J. Hall which has been relied upon by the appellants, the manufacture of needle-loom carpets involves punching of a thick layer or web of loose fibres laid over a hessian base fabric by rows of vertical needles each having a hard resulting in the fibres becoming anchored in the base fabric and on account of anchorage of fibre tufts at this stage being less than in case of woven carpets, it is important to further strengthen it by sizing the underside by rubber, polyurethane or other polymer composition. It is evident that in the manufacture of needle-loom fabric even at the stage when the tufts of fibres get anchored in the base fabric as a result of punching or treatment of fibres laid on hessian base fabric, will have the characteristics of carpet or floor covering except that it would not be sufficiently durable on account of the anchorage of fibres at this stage being less than woven carpets. As far as the disputed non-woven fabrics are concerned, we find from the following extracts from the impugned order that after the stage of needle punching of fibre, they had undergone further strengthening by calendering or providing a synthetic base through treatment by chemical binder :-
"There is no dispute that this material is being used by Automobile Industry as floor coverings in the cars in Padmini Premier/Maruti. The purpose for which the material is being used is nothing but carpeting, in other words one can come to the conclusion that the material manufactured by the appellant has no other use but for floor covering as carpeting material. I have seen the samples as well and I find that FFB-1 and FFB-2 have a synthetic backing and can have no other use except flooring. As regards FFBW-1 the felt is sufficiently thick and can be identified, thickness of which is in two parts half being soft and half being hard. This felt FFBW-1 is apparently for covering the back portion of rear seat of the vehicle, the rear seat being flexible and when laid could be used for making more space. The said back side of the rear seat is used either for keeping some luggage or by passengers. The material so used is also utilised as carpeting and nothing else."
8. The fact that in order to impart strength and durability the disputed needle-loom non-woven felt had been subjected to further reinforcement/calendering after the needle punching stage also follows from the following extracts from the report of the Bombay Textiles Research Association which was referred to by the appellants :-
"Please refer to your letter dated 13th February, 1991 forwarding therewith four fabric samples for classification of the same. We give below our comments regarding the same.
1. Fabric marked C-7655 FFB-1:
The sample is reinforced needle punched non-woven felt with one side appears to be calendered.
2. Fabric marked C-7656 FFB-2:
This sample is also reinforced needle punched non-woven felt with one side chemical binder treated.
3. Fabric marked C-7657 FFB-3/FFB-4:
The sample is a reinforced needle punched non-woven felt.
4. Fabric marked C-7658 FFBW-1:
The sample is a reinforced needle punched non-woven felt with a back layer of waste fibres."
9. As discussed above, in our view the disputed product by needle punching of webs of fibre laid on a hessian base in a needle-loom and subjecting it to calendering or treatment by chemical binder will have characteristics of carpeting even though it may require further treatment of the base fabric with rubber, polyurethane or other polymer composition for imparting the same strength and durability as in the case of other woollen carpets. We, thererfore, hold that in the impugned order they were correctly held as classifiable under Tariff Item 22G.
10. In support of their case the appellants have placed reliance on the Tribunal's Order No. E/353/93-D, dated 15-10-1993 in which the Tribunal has held that needle-loom felt and fabric consisting of a web of textile fibres subjected to dry punch but not treated with latex was classifiable as felt under Heading 56.02 of the Schedule to Central Excise Tariff Act, 1985 and not as floor coverings of felt falling under sub-headings 5702.20 and 5702.90 of the Tariff. We find that in this decision, unlike the present case where the classification of the disputed products has to be decided having regard to the wordings of Item 22G of the erstwhile Central Excise Tariff the Tribunal having regard to the wordings of Heading 56.02 and sub-heading 5702.20 and 5702.90 and also the relevant notes to Chapters 56 & 57 of the Schedule to the Central Excise Tariff Act, 1985 came to the findings that the goods in question were more specifically covered by Heading 52.02 which reads as "Felt, whether or not impregnated, coated, covered or laminated". We are, therefore, inclined to agree with the Ld. SDR that the decision of the Tribunal cited by the appellants cannot be of any assistance to them.
11. In view of the foregoing we confirm the impugned order and dismiss the appeal.