1. This is a revision application filed before the Central Government which, under Section 131-B of the Customs Act, 1962, stands transferred to the Tribunal to be disposed of as if it were an appeal presented before the Tribunal.
2. The point that arises for decision is whether the fabric manufactured by the appellant and described by him as "unprocessed cotton fabric belting cloth woven as such" in the classification list is exempt under Notification No. 70/69, dated 1-3-1969 or not.
Admittedly, the fabric produced is of width of 91 centimeters and 103 centimeters and is cut to required size to make it suitable for belting of the machinery on which they are used.
3. The Assistant Collector, in his order dated 14-7-1975, observed that the fabric in question has a weave of canvas cloth and has a width of 91 cms and could not be termed as belting "by any stretch of imagination". This view was based on a report of the Chemical Examiner who opined that the sample had weave construction of canvas. The A.C.further stated: "As has been contended by the party, the fabric in question may be eligible to be used as belting cloth by some unit but for this reason only the cloth cannot be termed as belting cloth eligible for clearance at nil rate of duty particularly when this has a weave of canvas and can also be used as canvas". He, therefore, held that the fabric should be assessed as canvas.
4. The Appellate Collector upheld the Assistant Collector's order and observed that what is exempted under Notification No. 70/69 is belting woven as such and that the exemption is to belting and not to belting cloth. As the subject cloth has been woven on an ordinary loom while belting is woven on special looms, the impugned goods could not get the benefit of the notification, He also took note of the width (91 cms.) of the fabric and noted that the fabric is cut to required size to make it suitable for the appropriate machinery. He held that "it is not the intention of the above notification to exempt belting cloth which goes into further processing to be used as belting. Therefore even if the fabric in question has been ultimately used as belting it will not qualify for exemption under the above notification because it was not woven as such".
5. In the appeal and in the hearing the appellant submitted that the word "belting" has been defined in the book "Textile Terms and Definitions" published by the Textile Institute, as follows : "A generic term covering all forms of belts and rolls of material from which belts are made up that are designed for the transmission of power or for the purpose of conveying or elevating".
He submitted that canvas and belting have common weave and it, therefore, cannot be held that if the weave is common belting must be regarded as canvas. The notification did not lay down any limitation on the weave or width of the cloth. He further averred that belting cloth was woven as such and was consumed as conveyor belting in the biscuit factory. He also referred to the ISI standards and claimed that these did not distinguish between canvas and belting even on the basis of weaving structure. He further submitted that no separate looms were used for belting and the same looms are used for canvas or belting.
6. The Representative for the Department, Shri Hem Prakash, submitted that the Notification No. 70/69 does not contemplate cutting to size and the words "woven as such" exclude any further process like cutting etc. However, he accepted that the weave of the subject goods was belting weave.
7. We have considered the submissions made by both sides. Notification No. 70/69 exempts specified cotton fabrics falling under Sub-item I of item 19 of the First Schedule to the Central Excises and Salt Act "from the whole of the duty of excise leviable thereon" and item (xii) thereof is "unprocessed cotton hose pipes and belting woven as such".
The question, therefore, is whether the fabric manufactured by the appellant can be called "belting woven as such" or not. The finding by the lower authorities that the weaving of the product is the same as of canvas is not relevant because, as explained by the appellant, his product is admittedly being used as belting in a biscuit factory. The appellant's argument that the notification or the ISI standards do not lay down any measurements in respect of belting is also relevant.
8. The wording "belting woven as such" does have a degree of vagueness about it, but in our opinion a little consideration would show that what is meant by these words is only belting and the intention seems to be that when it comes off the loom the fabric should be belting and there should not be any more processes before it so becomes belting. In the instant case, there is no doubt that what comes off the looms is belting and the appellant has also shown that it is used as a belting by the biscuit factory. That the belting has to be cut to size to be fitted in the machines cannot be a circumstance against calling it belting because it is not possible to contemplate a situation in which belting would come off the looms in the exact required shapes and sizes. The notification, therefore, could not have contemplated such a situation. We, therefore, hold that the cutting of the belting cloth for fitment to the machines as conveyor belt should not stand in the way of granting the exemption in terms of the notification.
9. In the circumstances, we hold that the belting cloth manufactured by the appellant and used after cutting to size on machines, has to be considered as "belting woven as such". The benefit of the Notification No. 70/69 should be extended to it. We accordingly allow the appeal.