Central Excise-I, Hyderabad Vs. M/S Charminar Non - Wovens Ltd.  INSC
1548 (8 September 2009)
SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 3828 OF
2007 Commissioner of Central Excise ...Appellant(s) Hyderabad-I M/s. Charminar
Non-Wovens Limited ...Respondent(s)
In this appeal filed by the Revenue, the issue is whether
non-woven carpets having exposed surface of polypropylene are classifiable
under heading 5703.20 as "jute carpet" to justify concessional rate
of duty or whether the said non-woven carpets are classifiable under heading
5703.90 as "other carpets".
It is not in dispute that the period which is involved in this
case is between April, 1996 to October, 1996.
The show-cause notice was issued by the Revenue against the
respondent on 6.11.1996 alleging the respondent's a case of mis-classification
of carpets under heading 5703.20 and thereby mis-utilization of the benefit of
Notification No.29/95-CE dated 16.3.95 and 16/96-CE dated 23.7.1996 and thus
clearing the goods at concessional rate of duty of 5%. The Revenue's case is
that such concessional rate of duty is available only for jute exposed surface
floor coverings and, therefore, there has been contravention of Rule 9(1),
52-A, 173-B, 173-F and 173-G of the Central Excise Rules, 1944.
The case of the respondent is that it is manufacturer of blankets,
carpets and floor coverings falling under Chapter 63 and 57 of the Central
Excise Tariff Act, 1985 (hereinafter "the said Act") and its products
known as "Charms Jute Floor Coverings", is classifiable under chapter
sub-heading No. 5705.00 (before 26.7.1996) and then under chapter sub-heading
The respondent contested the aforesaid show-cause proceedings and
therein an adjudication order dated 29.11.2004 was passed. In passing the said
adjudication order, the adjudicating authority returned several findings to the
effect that in the past the issue involved in this case was decided in favour
of the assessee by Collector of Central Excise (Appeals) vide its order dated
16.07.1993. After the said order, no objection was raised by the Revenue and
the assessee continued to discharge its obligation of duty liability in terms
of the said order. The adjudication authority also came to a finding that the
surface of the goods manufactured by the assessee is neither piled nor looped with
ground fabric, rather the goods are manufactured by needle punching process.
The aforesaid findings were arrived at after examining a piece of the sample of
floor coverings which were produced in the course of hearing. The adjudicating
authority also came to a finding that in the goods manufactured by the
assessee, predominance of jute content by weight has not been disputed in the
show-cause notice. Rather the chemical examiner's report dated 28.08.1991
clearly states the predominance of jute by weight in the product. Therefore,
the adjudicating authority followed the decision of CESTAT in the case of Uni
Products (I) (Tri.-Delhi), and held that the process of manufacture of non-
woven carpets which is followed in the case in hand is exactly the same which
was followed in the case of Uni Products (supra) and accordingly the show-cause
proceedings were dropped against the assessee by an order dated 29.11.2004.
Against the said order, an appeal was filed by the Revenue and the
said appeal came to be decided by the Commissioner of Customs and Central
Excise (Appeals), Hyderabad. In the course of hearing of the appeal, the
appellate authority noted why the adjudication authority decided that the
classification of the product in question should be under sub-heading 5703.20.
The appellate authority also noted that the said carpet was physically examined
by the adjudicating authority, and after doing so, the adjudicating authority
came to a finding that floor covering was neither piled nor looped, rather the goods
were manufactured by needle punching process. The adjudicating authority,
therefore, came to a concurrent finding that the goods in question were
correctly classified under chapter sub-heading 5703.20 and are not to be
classified under "other" under chapter sub-heading No. 5703.90. The
appellate authority also held that the decision of CESTAT in the case of Uni
Products (supra) is applicable in the facts of the case. With the said finding,
the appellate authority rejected the appeal of the Revenue.
When the Revenue further took the appeal up to Tribunal, the
Tribunal referred to its decision in the case of Commissioner (193) ELT 295
(Tri.-Kolkata), and held that the issue is covered by the decision in Champdany
Industries (supra). The appeal filed against the same decision rendered in the
Champdany Industries (supra) has been dealt with by this Court in the case in
Civil Appeal Nos.7075-7076 of 2005. In that judgment, all the issues raised by
the Revenue have been discussed in detail. After such detailed discussion, the
contentions of the Revenue have been rejected.
Following the same parity of reason contentions of the Revenue,
which are identical in this case, are also rejected.
from that, it appears that in this matter the Revenue's case has been
constantly rejected at all the three levels, namely, in the adjudication order
passed by the Addl. Commissioner of Central Excise, in the appellate order
passed by the Commissioner (Appeals) and in the Tribunal. Such decisions have
been rendered on the basis of the relevant materials and after analyzing the
evidence on record as also the provision of Section Notes and Chapter Notes.
Such concurrent findings by the lower authorities are interfered with by this
Court in exercise of its jurisdiction under Section 35L of Central Excise and
Salt Act, 1944 only when such findings are patently perverse or are based on
manifest misreading of any legal provision. Here none of these situations is
Reference in this connection may be made to the decision Ahmedabad
- 2003 (157) ELT 502 (SC). In that judgment, the learned Judges of this Court
held that with the concurrent finding of facts reached by lower authorities in
classification on the basis of evidence and on analysis of relevant legal provision
interference is not called for by this Court in exercise of its power under
Section 35L of the Central Excise Act, 1944.
Collector, quoted in 2006 (199) ELT A.127, this Court held where
there is a concurrent finding of fact by the authorities below in support of
respondents claim for classification normally this Court does not interfere
with such concurrent findings.
In view of the aforesaid settled law, this Court does not find any
merit in the appeal filed by the Revenue. The Revenue's appeal is thus
dismissed. However, there is no order as to costs.
.........................J. (D.K. JAIN)