LexTHE COMMISSIONER OF CENTRAL EXCISE, BHUBANESWAR-1 versus M/S. CHAMPDANY INDUSTRIES LIMITED
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
[2009) 14 (ADDL.) S.C.R. 211
THE COMMISSIONER OF CENTRAL EXCISE,
BHUBANESWAR-1
v.
M/S. CHAMPDANY INDUSTRIES LIMITED
(Civil Appeal No. 7075-7076 of 2005)
SEPTEMBER 8, 2009
[D.K. JAIN AND ASOK KUMAR GANGULY, JJ.]
Central Excise Tariff Act, 1985:
First Schedule, Chapter 57 - Chapter Note I - Jute
Carpets/jute floor coverings -
Classification of -
Predominance test - Carpets made of yams of jute, cotton
and polypropylene, jute being more than 50% predominated
A
B
c
"°'
by weight over each of the other single textile material -
D
HELD: Carpets in question can be classified as jute carpets/
jute floor coverings - Classification of goods - Case not
made out in show-cause notice cannot be argued in court -
Role of Chapter Notes - Explained -Central Excise Tariff Act,
1985 - Practice and procedure.
E
The respondent-assessee manufactured B.L. and
,. S.M. varieties of carpets interlacing yarns of jute, cotton
1
and
polypropylene-jute being more than 50%
predominated by weight over each of the other single
textile material. The carpets did not have any base
F
material. Although these facts were admitted by Revenue,
yet, it issued show-cause notice to the respondent, for
the period 1991 to 1999, stating that the surface of the
carpets being entirely of polypropylene, the same, as per
Note I of Chapter 57 of the First Schedule to the Central
G
""'(
Excise Tariff Act, 1985, could not be classified as jute
carpets but were classifiable as polypropylene. The
Assistant Commissioner rejected representation of the
assessee. The Commissioner (Appeals}, however,
211
H
\
212 SUPREME COURT REPORTS {2009] 14 (ADDL.) S.C.R.
allowed the appeals of the assessee and the Customs,
'\
A
Excise and Service Tax Appellate Tribunal dismissed
Revenue's appeal. Aggrieved, Revenue filed the appeals.
Dismissing the appeals, the Court
B
HELD: 1.1. A perusal of Chapter Note 1 of Chapter
57 of the First Schedule to the Central Excise Tariff Act,
1985 makes it clear that the same merely defines the term
carpet and other floor coverings "for the purposes of this
}-
Chapter", namely, Chapter 57. The role of the Chapter
c Note is only to decide whether or not the goods in
question are carpets and other textile floor coverings for
the purposes of Chapter 57. Once the goods are carpets
and falling under Chapter 57, the role of Chapter Note 1
comes to an end. It is also the case of the Revenue that
D Chapter Note 1 cannot be pressed into service for the
~
,
purpose of classification. [Para 18 and 19l [219-G-H; 220-
..
A·B]
1.2. Rule 1 of the "General Rules for the Interpretation
E of the said Schedule" which are part of the Central Excise
Tariff Act, 1985, provides that classification shall be
determined according to the terms of the Headings and
any relevant Section or Chapter Notes. In the instant case,
·-~ ,.,,
as per Section Notes 2(A) and 14A for the period between
F
1994-1995 and Section Note 2(A) read with· sub-heading
Note 2(A) thereafter, the inter-se classification has to be
done under different headings and sub-headings. [Para
21 to 23] [221-A-C]
1.3. Since the goods in question admittedly fall under
G Chapter 57 and consist of more than two or more textile
materials, it has to be classified on the basis of that textile
. ,..,
material which predominates by weight over any other
singre textile material. As in the goods in question jute
admittedly predominates by weight over each other single
H textile material, the same could only be classified as jute
COMMNR. OF CENTRAL EXCISE, BHUBANESWAR-1 v.
213
CHAMPDANY INDUSTRIES LTD.
carpets/jute floor coverings and nothing else. This logic A
and reason is in consonance with the interpretation of the
Chapter Note, Section Note and the sub- headings. The
contrary interpretation given by the Revenue is not
correct. [Para 24 and 25] [221-C-F]
HPL Chemicals Ltd. vs. Commissioner of Central Excise,
B
Chandigarh (2006) 5 SCC 208; Dunlop India Ltd. vs. Union
of India and others (1976) 2 sec 241; Mis Bharat Forge and
Press Industries (P) Ltd. vs. Collector of Central Excise,
Baroda, Gujarat (1990) 1 SCC 532; and Mis .. lndo
International Industries vs. Commissioner of Sales Tax, Uttar C
Pradesh (1981) 2 SCC 528, relied on.
1.4. It is not disputed by the Revenue that by the
'\-- predominance t~st the_ content of the jute in the carpet is
highest and more than ~0%. Polypropylene fiber.has also
D
been accepted by the ReExcerpt shown. Read the full judgment & AI analysis in Lexace.