M/S. SHARP INDUSTRIES LTD. versus COMMISSIONER OF CENTRAL EXCISE, MUMBAI-III

Citation: [2005] SUPP. 3 S.C.R. 475 · Decided: 26-09-2005 · Supreme Court of India · Bench: S.N. VARIAVA · Disposal: Dismissed

Judgment (excerpt)

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_, 
• 
MIS. SHARP INDUSTRIES LTD. 
A 
v. 
COMMISSIONER OF CENTRAL EXCISE, MUMBAI-III 
SEPTEMBER 26, 2005 
[S.N. VARIAV A AND TARUN CHATTERJEE, JJ.] 
B 
Constitution of India: 
Article I 36-Interference under-Central excise tariff-Classification 
of product-Concurrent findings of Commissioner (Appeals) and Tribunal, C 
based on test reports-Held, findings being based on facts and Tribunal 
being final authority an facts, Supreme Court would not interfere 
Central Excise Tariff Act, I 985: 
Tariff Headings 39.20.38 and 39.23.90-76.07 and 76.12-Aluminium D 
foil covered on one side with polyester film and on the other with 
polyethylene-Held, Tariff Heading 39 is the specific heading which covers 
the product. 
Practice and Procedure: 
Decision of Tribunal expressing contrary views-Assessee citing the E 
decision favouring it and not pointing out to the Tribunal the earlier decision 
in its own case holding against the assessee-Held, this conduct has to be 
deprecated-The Department has also been negligent in not pointing out 
this fact to the Tribunal-Government Litigation. 
Precedent: 
Customs, Excise and Gold (Control) Appellate Tribunal-Holding in 
impugned decision that aluminium foil classifiable under Tariff Heading 39 
and not under 76-But in subsequent cases holding to the contrary-Held, 
F 
the subsequent judgments can have no bearing on the impugned judgment, 
which is a prior-Jn subsequent cases Revenue was negligent in not citing G 
the impugned judgment which would have been a binding precedent-
Government litigation. 
Words and Phrases: 
475 
H 
476 
SUPREME COURT REPORTS [2005) SUPP. 3 S.C.R. 
A 
"Backed"-Meaning of-Jn the context of Central Excise Tariff Act, 
1985. 
Assessee a manufacturer of aluminium foil covered on one side with 
polyester film and on the other with polyethlene, and pouches made thereof, 
claimed the products to be classified under TariffHeading 76.7 and 76.12; 
B whereas according to the Revenue, the products were classifiable under Tariff 
Headings 39.20.38 and 39.23.90. All the authorities below including the 
Commissioner (Appeals) and the Customs, Excise and Gold (Control) Appellate 
Tribunal held against the assessee. 
In the appeal filed by the assessee before the Supreme Court, it was 
C pointed out that subsequent to the impugned judgment, the Tribunal took a 
contrary view in a number of cases. 
D 
E 
Dismissing the appeals, the Court 
HELD: I. The Commissioner (Appeals) and the Tribunal have based their 
decisions upon test reports which show that plastic predominates over the 
aluminium foil accounting for 2/3rd of the total weight. Reliance has also 
been placed on HSN Explanatory Notes. The findings being based on facts 
and the Tribunal being the final authority on facts, this Court would not 
interfere. (478-8-Cf 
J.K. Synthetics Ltd. v. Commissioner of Central Excise, Jaipur, [2003] 
11 SCC 349 and Ugam Chand Bhandari v. Commissioner of Central Excise, 
Madras (2004( 5 SCC 757, relied on. 
2. Tariff Heading 39 is the specific heading which covers the products. 
F From the test reports, it is clear that plastic predominates in the product, as 
70-80% of the product consists of plasitc. Tariff Entry 76.07 only deals with 
aluminium foilis which are backed with paper, paperboard, plastic or similar 
other backing material. The term "backed" necessarily means that the 
coating can only be on one side. In this case, the product cannot be said to be 
"backed". It is coated with different materials on both sides. Therefore, on 
G merits also the view taken by the lower authorities is the correct view. 
[479-8-C, EJ 
3. The subsequent Judgments can have no bearing on the correctness 
or otherwise of the impugned Judgment which is a prior. The Revenue appears 
H to have been negligent in not citing the impugned Judgment, which decided 
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SHARP INDUSTRIES LTD.'"· COMMR. OF CENTRAL EXCISE, MUMBAI-Ill [V ARIA VA, J .] 4 77 
the law correctly, at the time India Foils Ltd's case was being decided by the A 
Tribunal. Had it been cited it would have been a binding precedent. The 
Department's negligence is further brought out by the fact that the judgment 
in India Foils Ltd's case was not carried in Appeal before this Court. As 
regards the order dated 7th July, 2005 passed in an another case of the 
assessee, wherein it has been held by the Tribunal that the assessee's product B 
is classifiable under Tariff Heading 76.07 and not 39.20, was based on R. T. 
Packaging Ltd. 's c

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