COMMISSIONER OF CENTRAL EXCISE, DELHI-III versus M/S. UNI PRODUCTS INDIA LTD.

Citation: [2020] 13 S.C.R. 295 · Decided: 01-05-2020 · Supreme Court of India · Bench: DEEPAK GUPTA · Disposal: Dismissed

Cited by 1 judgment(s) · cites 3 · see the full citation network in Lexace

Judgment (excerpt)

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   [2020] 13 S.C.R. 295
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COMMISSIONER OF CENTRAL EXCISE, DELHI-III
v.
M/S. UNI PRODUCTS INDIA LTD.
(C. A. Nos. 302-303 of 2009)
MAY 01, 2020
[DEEPAK GUPTA AND ANIRUDDHA BOSE, JJ.]
Central Excise Tariff Act, 1985 – First Schedule- Chapters
57, 87 – Car mats to be classified under chapter-heading 57.03 or
87.08 – Respondent-assessee was engaged in business of
manufacture of textile floor coverings and car matting – Cleared
goods against Heading No. 570390.90 which inter alia had excise
duty @ 8% as compared to 16% if classified under heading
8708.99.00 – Three show-cause notices issued over such clearance
of goods – Commissioner held car mattings to be parts and
accessories classifiable under Chapter 87.08 – Tribunal decided
in favour of respondent – On appeal, held: Chapter 87 does not
contain car mats as an independent tariff entry – Though in common
parlance the products involved may not be considered as carpets,
in view of the wordings of the chapter, section notes, chapter notes
and explanatory notes, the goods were classifiable under chapter
heading 570390.90 – Subject-item does not satisfy the third
condition specified in Section XVII of the Explanatory Notes in
relation to “III-Parts and Accessories” – Subject-goods come under
the chapter-heading 570390.90 – Impugned decision sustained.
Dismissing the appeals, the Court
HELD: 1.1 Reference has been made to “Harmonized
Commodity Description and Coding System”, Explanatory Notes
issued by the World Customs Organisation (2002). These Notes,
termed HSN Explanatory Notes have been referred to by both
the parties. Strong persuasive value of these Explanatory Notes
has been recognised by this Court. General Rules for the
Interpretation of the Harmonized System lay down the Principles
of Interpretation for classification of Goods in the Nomenclature.
Clause 3 (a) of the General Rules For the Interpretation of First
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SUPREME COURT REPORTS
[2020] 13 S.C.R.
Schedule to the Central Tariff Act, 1985 in cases where
possibilities arise of a single item being classified under more
than one head corresponds to the said Rule 3(a) of the Explanatory
Notes. Section Note 2 of Section XVII of Central Excise
Tariff excludes eleven sets of items from being treated as parts
and accessories. There is reference to “PARTS AND
ACCESSORIES” under the main heading “GENERAL”, in
Section XVII of the HSN Explanatory Notes, 2002. Under the
sub-heading “(iii) PARTS AND ACESSORIES”, a three-layer test
has been postulated. It is on satisfying all of these conditions a
particular item would come under that chapter head. The
Explanatory Notes dealing with parts and accessories under
chapter-head 87.08 includes floor mats (other than of textile
materials or unhardened vulcanised rubber). Chapter Notes to
Chapter 57 of the HSN Explanatory Notes, relating to carpets
and Other Textile Floor Coverings are relevant for effective
adjudication of these two appeals. The said instrument, i.e. HSN
Explanatory Notes deal with four entries against tariff item
no.5703. [Para 6-9, 15 and 16][304-B-C, D, F-G; 305-C, E; 310-
C-H]
CCE v. Wood Craft Products Ltd. (1995) 3 SCC 454 :
[1995]  2  SCR  797; Collector of Central Excise vs.
Bakelite Hylam [1997 (91) E.L.T. 13 (S.C.); Collector
of Customs v. BusinessForms Ltd. (2005) 7 SCC 143;
Holostick India Ltd. v.Commissioner of Central Excise
(2015) 7 SCC 401 : [2015] 4  SCR 576 – relied on.
1.2 “The common parlance test”, “marketability test”,
“popular meaning test” are all tools for interpretation to arrive
at a decision on proper classification of a tariff entry. These tests,
however, would be required to be applied if a particular tariff entry
is capable of being classified in more than one heads. So far as
subject-dispute is concerned, this Court has already referred to
Chapter note 1 of Chapter 57. This note stipulates that carpets
and other floor coverings would mean floor coverings in which
textile materials serve as the exposed surface of the Article when
in use. This feature of the car mats has not really been rejected
by the revenue authorities as untrue in the order of the
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COMMISSIONER OF CENTRAL EXCISE, DELHI-III v.
M/S. UNI PRODUCTS INDIA LTD.
Commissioner, before whom assertion to that effect was made
by the respondent. Core issue in these appeals is as to whether
car mats come under chapter-heading 57.03 or not. In the second
appeal, the numerical representation of the product, as claimed
by the

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