Collr. of C. Ex. Vs. Angora Wool Combers Pvt. Ltd. - Court Judgment

Excerpt:

.....collector (appeals). the collector as per his impugned order observed that scoured wool is not a new product and 'scouring' is not process of manufacture. accordingly, the collector (appeals) set aside the order of the assistant collector and allowed the consequential relief.4. not being satisfied with the findings given by the collector (appeals) the department has come before us by way of this appeal in which it has been urged that scoured wool was appropriately classified under tariff item 68 and this classification had not been contested by the assessee. it was also submitted that the raw wool which is subjected to process of cleaning of dirt, natural grease and washing with soaps and alkalies or other solvents brings into existence scoured wool which is different from raw-wool and known differently in trade.5. shri tandon appearing for the respondents submitted that issue involved in this case has already been considered by the tribunal in the case of punjab wool combers ltd., as per order no. e/186-187/94-d dated 6-4-1994 1994 (71) e.l.t. 844 (tribunal).6. the point to be considered in this case is whether scoured wool is an excisable commodity assessable to duty under.....

Judgment:

1. This is an appeal filed by the department against the Order-in-Appeal dated 17-12-1990 passed by the Collector (Appeals).

2. Heard Shri S. Kannan, learned JDR for the Revenue and Shri T.R.Tandon, learned Consultant, for the respondents.

3. The respondent has filed a refund claim on the ground that scoured wool is nothing but wool from which the grease has been removed almost entirely by washing with hot water and soap or other detergents or with alkaline solutions. The refund claim was rejected by the Assistant Collector as per his Order No. 12/Refd/84 dated 16-5-1984 on the ground that the party has voluntarily declared scoured wool under Tariff Item 68 and they did not choose to contest the approval of classification list. He also observed that moreover, after scouring of wool, a new product 'scoured wool' comes into existence having different character and use. Aggrieved by the said order the party filed an appeal to the Collector (Appeals). The Collector as per his impugned order observed that scoured wool is not a new product and 'scouring' is not process of manufacture. Accordingly, the Collector (Appeals) set aside the order of the Assistant Collector and allowed the consequential relief.

4. Not being satisfied with the findings given by the Collector (Appeals) the department has come before us by way of this appeal in which it has been urged that scoured wool was appropriately classified under Tariff Item 68 and this classification had not been contested by the assessee. It was also submitted that the raw wool which is subjected to process of cleaning of dirt, natural grease and washing with soaps and alkalies or other solvents brings into existence scoured wool which is different from raw-wool and known differently in trade.

5. Shri Tandon appearing for the respondents submitted that issue involved in this case has already been considered by the Tribunal in the case of Punjab Wool Combers Ltd., as per Order No. E/186-187/94-D dated 6-4-1994 1994 (71) E.L.T. 844 (Tribunal).

6. The point to be considered in this case is whether scoured wool is an excisable commodity assessable to duty under Item 68 of the Central Excise Tariff. The Tribunal in the orders referred to above based upon the department's own understanding as per Circular F. No. 525/8/85-Cus.

TU of the Central Board of Excise & Customs dated 23-7-1985. and that the raw-wool covers scoured wool also. The relevant portion of the circular is reproduced as under :- "I am directed to say that question of classification of scoured wool was examined in the Board. The matter was examined against the background of the scheme of classification in the CCCN. As the classification in our Tariff follows CCCN, the scope of the merged reading in our Tariff, unless otherwise specifically clarified, is same as the sum-total of the individual headings in the CCCN. Classification in the CCCN could be one of the guiding factors for determining classification under our Tariff. Heading 53.01/05(2) covers wool raw, as also wool tops. Viewed against the background of the scheme of the CCCN, the term 'wool raw' should include sheep's or lamb's wool not carded or combed given in the Heading 53.01 of CCCN. The Explanatory Note in regard to this item clarifies that scoured wool is wool from which the grease has been removed almost entirely by washing with hot water and soap or other detergents or with alkaline solutions. Therefore, wool, raw as given in our Tariff should cover scoured wool also. The Chief Chemist has referred to the ASTM, which describes wool, raw as wool or hair of sheep in the greased, pulled or scoured wool. It further goes on to say that scoured wool, even though it is no longer in its original raw state, is generally accepted as raw wool. Therefore, it can be held that Item 53.01 /05(2) covers scoured wool. This clarification is issued for the proper interpretation of the Notification No. 64/85-Cus., dated 17-3-1985." Accordingly, it is clear that scoured wool is nothing but wool and same cannot be assessed to duty under Item 68. Since the issue has already been considered by the Tribunal, following the precedent, we accept the contentions of the assessee and, accordingly, the appeal filed by the department is hereby dismissed.