K. Prakash Anand, Member (T)

1. In this matter, appellants are alleged by the department to have cleared HOPE woven fabrics, front' November 1986 to March 1987, valued at Rs. 69,21,724.00, in the form of what the department calls "cut to the size of woven sacks as per the requirements of the purchasers after giving them necessary shape and size of the woven sacks except stitching operation".

2. The Show Cause Notice to the party, relying on Rule 2(a) of the: Rules for the Interpretation of the Schedule to the Central Excise Tariff 1985 (5 of 1986) alleged that the aforesaid goods being in the form of cut to the size and shape of woven sacks, fell within the purview of incomplete unfinished woven sacks classifiable under heading 63.01 of sub-heading 6301.00.

3. The Assistant Collector held that such pieces of fabrics are cut to specific length and size of woven sacks and bags and therefore, correctly classifiable under subheading 6301.00. This view was also upheld by the Collector of Customs and Central Excise (Appeals), New Delhi and it is against his order that the matter has come up in appeal before us.

4. We have heard Shri V. Lakshmikumaran and Shri A.R. Madhav Rao, Advocates on behalf of the appellants, and Shri L.C. Chakraborthy, JDR on behalf of the department.

5. It is submitted on behalf of the appellants that they are making HDPE fabrics both on flat looms and circular looms. Such fabrics are claimed to fall under heading 54.08 attracting nil rate of duty. It is alleged that the fabrics made out of HDPE tapes are bulky in nature and are, therefore, required to be cut to size to facilitate packing, handling, transport etc. This is reported to be the universal practice of all manufacturers of HDPE fabrics.

6. It is added that the fabrics were being classified under heading 54.08 right from the beginning i.e. 28-2-1986 and the classification list to this effect was duly approved.

7. The principal submission of the appellants is that cut lengths of circular woven fabrics do not have the essential character of woven sacks and hence Rule 2(a) of the Interpretative Rules is not applicable. On the other hand, it is claimed that Note 5 to Section XI clearly rules out such fabrics in cut lengths being considered as made up articles.

8. From the department's side, it is emphasized that the goods in question would appear to be nothing but cylindrical hollow tubings, cut and prepared as per customer's specifications. It is contended that they only require stitching at the ends and are, therefore, to be considered as blanks of sacks. The Departmental Representative reiterated that these are semi-finished goods which have assumed the essential characteristic of bags.

9. On the other hand, the learned JDR also submits that the point made by the appellants regarding Note 5(a) of Section XI of the Tariff was not raised before the Assistant Collector. Nor did the process of manufacture of the impugned goods come in for detailed consideration. There is no finding whether the products can be considered as rectangular. It is submitted that tubular pieces cannot be considered rectangular or square. It is, however, conceded that on this factual aspect, there is no finding of the lower authority. Therefore, it is submitted on behalf of the department that the matter may be remanded for de novo consideration, keeping in view this aspect of the matter.

10. The learned Advocate Strongly opposes remand of the matter. He contends that this is not a fit case for remand as the Assistant Collector has already given his findings on facts. It is stated that the exact nature of the product was fully discussed in appellant's letter to the department dated 17th March, 1987. This also came up for observation during the personal hearing held on 7th May, 1987.

11. We have carefully considered the facts of the case and the submissions made before us. We find that HDPE tapes wound on bobbins are continuously fed into circular looms for weaving into fabrics. These f