I am directed to draw your attention to Board's Circular No. 6/91 dated 11.4.91 wherein it was clarified that wax coated canvas cloth would merit classification under heading 59.06 of the Central Excise Tariff if there is formation of visible layer on the surface of the fabric and not merely a change of colour or some residue. If, on the other hand, there is no visible layer formation, then the said wax proofed/ tarpaulin cloth would be classifiable in Chapter 52 of the Central Excise Tariff as water proofed cloth, provided that base fabrics are cotton fabrics. It also clarified therein that a "layer" should be distinguished from mere presence of residues in uneven patches.

2.     It has been represented that the criteria of visible layer formation on the fabric has posed problems in deciding the classification of tarpaulin cloth/ wax coated canvas cloth leading to divergence in practice of classification of the subject goods. It is reiterated that a visible layer is different from uneven residues and patches, and it should be a uniform coating visible by the naked eye otherwise than through a change of colour.

3.     The criteria of visible layer formation prescribed in the aforesaid Board's Circular was based on Chapter Note 5 (a) of Chapter 59 of the CET which sets out that Heading 59.07 would not apply to fabrics in which impregnation, coating or covering cannot be seen with the naked eye (no account being taken of resulting change in the colour of the fabrics).

4.     The Chief Chemist who was consulted has advised and it is also seen from the available samples in the file that there is no visible layer formation and hence most of these fabrics would prima facie be classifiable under Chapter 52.

5.     Moreover the reference to tarpaulin fabrics under Chapter 59 is only in the Explanatory Notes to HSN and not in the Chapter Notes or Section Notes of CETA. As against this, water proofed fabrics are specifically mentioned under Chapter 52 of CETA- unlike the HSN. Hence this entry would prevail over the entry in the Explanatory Notes to HSN.

6.     Further it is seen from I.S. Standard IS: 2089 - 1977 for water proofed fabrics and Pauline�s, that for manufacture of tarpaulin, firstly canvas/ duck fabrics are water proofed (which are covered by Chapter 52); and later these are converted into tarpaulins by stitching and putting eye lets.

7.     In the circumstances, it is hereby clarified that the classification of the subject goods may therefore be decided on the basis of facts and circumstances of each goods keeping in view the visibility criteria discussed in Board's aforesaid Circular and the position explained above in Paras 4, 5 & 6. In case of doubt, the samples can be got tested by Dy. Chief Chemist. All pending show cause notice (s) may please be finalised early on these lines.