Delhi, Delhi-Iii Vs. M/S. UNI Products (I) Ltd  INSC 1546 (8 September
SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.3758 OF
2006 Commissioner of Central Excise ...Appellant(s) M/s. UNI Products (I) Ltd.
& Ors. ...Respondent(s) With Civil Appeal Nos.5631, 4686, 5845 of 2006 And
Civil Appeal No.5342 of 2007
This judgment deals with Civil Appeal Nos.3758/2006, 5631/2006,
4686/2006, 5845/2006 and 5342/2007.
It appears that in all these appeals, the respondents are
manufacturing non-woven floor coverings where the basic fabric is jute, but the
case of the appellant is that the exposed surface is made of synthetic textile
material like polypropylene felt or polypropylene fiber and as such these goods
cannot be classified as non-woven jute floor coverings.
In the case of Civil Appeal No.3758 of 2006, the show-cause notice
was issued on 5.5.1997 and the case of the Revenue as set out in paragraph No.
6.8 of the show-cause notice is as follows:
it appears that the said textile floor coverings are classifiable as `other
textile floor coverings' under sub heading 5703.90 of CETA leviable to duty @
as floor coverings of jute under sub heading 5703.20 of CETA......"
The case of the respondents-company as disclosed in the counter
affidavit is that it has relied on a technical opinion given by 2 Prof. P.K.
Banerjee, who has the experience of research in non-woven textile material and
he has given his opinion of the products manufactured by the
respondents-company to the effect that the products which are manufactured by
the respondents-company cannot be classified as floor coverings with piled or
In the reply to the show-cause notice given by the
respondents-company, they have relied on the said opinion of Prof. P.K.
Banerjee, a Professor in the Indian Institute of Technology, who visited the
factory of the respondents and examined the manufacturing process of the
varieties of carpets in question and gave the said opinion.
The Revenue before us also did not dispute the correctness of the
The learned counsel for the respondents- company also relied on an
Order-in-original No.69/89 dated 29/12/1989 passed by the Collector, Central
Excise, New Delhi as also the findings recorded in the said order. The relevant
portion of the said order is as below:
(1) of Chapter 57 will not determine the fact that floor covering is floor
covering of jute or polypropylene. The said Chapter Note describes and defines
the floor covering. Section Note (4) and (14) has to be necessarily considered
for this purpose. It is an admitted position that the top surface (exposed
surface) does not have a pile or loop surface and hence Clause (b) of Section
Note 14 does not apply. Hence in terms of Clause (a) to Section Note 14
whichever textile material predominates in weight that will determine the
classification of the product. Since admittedly jute predominates in weight
over other textile material, namely, polypropylene goods are classifiable only
under heading 5702.20 and the classification already approved does not require
In the ultimate finding in the said order the Adjudicating
Authority came to the following conclusion:
the background of these facts, it would be seen that the party's contention
based on Chapter Note(1) of Chapter 57 and Sec. Note (2) and (14) of Sec. XI
that floor coverings are classifiable under 5702.20 is correct.
cause notice says that polypropylene constitutes exposed surface and hence
floor covering of the party should come under 5702.90 and not 5702.20, in spite
of the fact that polypropylene is not a predominating textile but jute alone is
predominating textile material.
point made in the show cause notice is without force and is not legally
correct. As contended by the party Chapter Note (1) of Chapter 57 is relevant
only for deciding whether the product is covered by the expression "carpet
and other textile floor coverings". This Chapter Note cannot and does not
decide the further question as to whether the product is floor covering of jute
or polypropylene. It only says that if the exposed surface of the article
textile material, the product is treated as carpet and other textile floor
coverings. To say that because exposed surface is polypropylene the product
would be treated as floor covering of polypropylene would be a total misreading
of Chapter Note(1).
5 On the
other hand, as rightly pointed out by the party, the question as to whether the
product is floor covering of jute or floor covering of polypropylene can be
decided only in terms of Sec. 14(a) of Sec. XI read with Sec.(2) of Sec. XI.
Stated briefly these section notes provide that products containing two or more
textile materials would be regarded as consisting wholly of that one textile material
which predominates by weight over any other single textile material. As already
stated it is an indisputed position that the textile material jute predominates
by weight over other textile material used in the floor covering namely
polypropylene. Hence the floor covering cleared by the party can be classified
only under 5702.20 and not under 5702.90. Thus on the merits of classification
of floor covering, party's contention alone represents the correct
interpretation and the classification already approved by the Assistant
Collector is hereby affirmed and confirmed."
Strong reliance was placed by the respondents on the said finding
by the adjudicating authority and the learned counsel for the Revenue could not
point out anything to the contrary.
Learned counsel for the respondents submitted that despite the
aforesaid finding, the present show- cause is wholly unnecessary.
However, in the said show-cause proceedings the Commissioner
ultimately dropped all penal proceedings and also the duty demand for the
period beyond six months.
Ultimately, the matter rested when the appeal was filed before the
Tribunal by the assessee and the tribunal in its order dated 30.9.2005 held as
is seen from the manufacturing process as explained by the learned advocate
that the carpet is manufactured in a continuous process and the said carpet is
to be considered as of one identity rather than as having separate identity of
having a exposed surface and under surface. The tacking of the fibers of
polypropylene and jute to be further needle punched into Hessian cloth brings
into existence one commodity that is carpet."
The tribunal after discussing the Chapter Notes, Sub-headings and
also the Section Notes returned a finding that the classification should be
done on the basis of the predominance test, that is to say, on the basis of
textile materials which predominate by weight over other single textile
The tribunal noted that before the adjudicating authorities it has
been claimed that the carpets manufactured by the appellants has jute contents
of 75% to 85% and the tribunal noted that "the revenue has not disputed
After opining as above, the tribunal went on to discuss the second
question, namely, whether the Hessian cloth has to be separated for the
purposes of the predominance test or not?
After discussing the matter in detail, the tribunal came to a
finding that while determining the predominance test, it would not be
permissible to exclude base fabric (Hessian cloth).
The tribunal came to the conclusion that the predominance test of
the assessee's products has to be done taking the product manufactured by it as
a whole and not by separating the layers and then applying the predominance
The tribunal also noted that the revenue's reliance on a single
dealer's statement indicating that the assessee's jute carpets are known in the
market as "Synthetic carpet" is of no consequence especially when
such statement is not substantiated by any evidence.
It is well known that the tribunal being the last authority on
fact, it is not proper for this Court, in exercise of its power under Section
35 L(b) of the Central Excise Act, 1944, to disturb such findings of the
tribunal since such findings are based on evidence.
For the reasons discussed above, we find no merit in this appeal.
The appeal is dismissed.
Since the same questions are involved in the other appeals with
slight factual modification, those appeals for the reasons discussed above and
also for the reasons given in Civil Appeal No.7075-7076 of 2005 are also
There shall be no order as to costs.
.......................J. (D.K. JAIN)