Commr.Of Central Excise-I,Hyderabad vs M/S Charminar Non-Wovens Ltd

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".

2. It is not in dispute that the period which is

involved in this case is between April, 1996 to October, 1996.

3. 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.

4. 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 No. 5703.20.

5. 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)

Ltd. Vs. Commissioner of Central Excise - 2006 (200) ELT 278

(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.

6. 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.

7. When the Revenue further took the appeal up to Tribunal,

the Tribunal referred to its decision in the case of Commissioner

of Central Excise, BBSR-I Vs. Champdany Industries Limited - 2006

(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.

8. Following the same parity of reason contentions of the

Revenue, which are identical in this case, are also rejected.

Apart 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 present.

9. Reference in this connection may be made to the decision

of Sidharath Pharmaceuticals Vs. Collector of Central Excise,

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.

10. Similarly, in the case of Auto Control (P) Ltd. Vs.

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.

11. 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)

.......................J. New Delhi (ASOK KUMAR GANGULY) September 8, 2009