Judgment

B.P. JEEVAN REDDY, J.

(1) THE respondent-company manufactures coated fabrics, popularly known as "rexine cloth" in the market. The question in issue in this appeal is whether the said product falls within Tariff Item 19(III) of the Schedule to the central Excises and Salt Act, 1944 as it obtained at the relevant time. The Original Authority held that it does but the Collector (Appeals) held to the contrary. The Revenues appeal before the Customs, Excise and Gold (Control) Appellate tribunal (CEGAT) was heard by a bench of three Members. By majority, the tribunal affirmed the judgment of the Collector (Appeals). The appeal preferred by the Revenue in this court was heard in the first instance by a bench comprising one of us (B.P. Jeevan Reddy, J. and B.L. Hansaria, J.) Inasmuch as the bench entertained a doubt as to the correctness of an earlier decision of this court in Collector of central Excise, Calcutta v. Multiple Fabrics Pvt. Ltd, [a judgment rendered by a bench comprising Ranganath Misra, J. (as he then was) and G.L. Oza, J.] which constituted the sheet-anchor of the respondent case, the matter was referred to a larger bench.That is how the appeal is before this bench.

(2) THE respondent purchases 100% cotton cloth and coats it with PVC resin and other plasticizers. The product is popularly known in the market as "rexine cloth". The composition of the rexine cloth manufactured by the respondent is to the following effect : (1) Cotton fabrics 8.0%

(2) PVC resin 24.5%

(3) Plasticizers (DIP/DIOP/BBP) 13.0%

(4) Others [Fillers, (Calcium Carbonate) 54.5%

Secondary Plasticizers, pigments, solvents,

thinners, foaming agents)]

T°à The above composition is by weight."

(3) THE main contention of the respondent which found favour both with the Collector (Appeals) and the majority of the Members of the CEGAT is that the rexine cloth manufactured by the respondent cannot be called a cotton fabric in view of the fact that cotton fabric represents a mere 8% of the final product (by weight) whereas the remaining 92% is represented by coating material. The respondents case which has been reiterated before us by its learned counsel, Shri Soli J. Sorabjee is that in commercial or in common parlance, rexine cloth is not understood or dealt with as a cotton fabric but as a distinct commodity. It cannot, therefore, be called a cotton fabric and even if it is treated as one by virtue of Tariff Item 19, the predominance or percentages referred to in the said Tariff Item should be applied in relation to the final product and not with reference to the cotton cloth which represents a very minor portion of the final product. The contention of the Revenue, on tlie other hand, is that coated fabric (in the case of the respondent, rexine cloth) is expressly placed within the purview of the cotton fabric by Parliament. In the face of such express inclusion, there is no room for arguing that the rexine cloth or coated fabric is not cotton fabric. May be that rexine cloth is not called or dealt with as a cotton fabric in the commercial world or in common parlance but that does not prevent Parliament from treating it as a cotton fabric for the purposes of the Act and indeed Parliament has chosen to include it within the ambit of cotton fabrics for the purposes of levying excise duty. Since the power of Parliament to do so is unquestioned, the respondents product is bound to be treated as cotton fabric within the purview of Tariff Item 19 and subjected to duty prescribed under sub- item (III) thereof. So far as the predominance or percentages referred to at the end of the first para of the Tariff Item is concerned, they are wholly irrelevant in the case of the respondents product inasmuch as the said predominance or percentages are applicable in relation to the base fabric and the base fabric in the case of respondents product is 100% cotton.

(4) FOR resolving the above controversy, it is necessary to t