Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2009 Supreme(SC) 1550

2009(6) Supreme 576
SUPREME COURT OF INDIA
Ganguly, J.
Commissioner of Central Excise —Appellant
versus.
M/s. UNI Products (I) Ltd. & Ors. —Respondents
Civil Appeal No. 3758 of 2006
Decided on 08-09-2009

Advocates Appeared:
For the Appellants : P.P. Malhotra, ASG, Ms. Madhurima fatia, S.K. Dubey, V. Dalmia, B. Krishna Prasad, Advs. With him for the Appellants.
For the Respondents:V. Lakshmi Kumaran, Alok Yadav, M.P. Devanath, Rupesh Kumar, Ms. Pankhuri Shrivastava, Advs, for the Respondents.

IMPORTANT POINT
It is well known that the tribunal being the last authority on fact, it is not proper for 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.

Headnote:Central Excise Act, 1944 – Section 35 L(b) – Classification of textile floor coverings – Respondents manufacturing non – woven floor coverings where the basic fabric is jute – Case of appellant that 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 – Issue of show cause notice by revenue on ground that textile floor coverings were classifiable as ‘other textile floor coverings’ under sub heading 5703.90 of CETA leviable to duty @ 30% Adv. and not as floor coverings of jute under sub heading 5703.20 of CETA – Tribunal after discussing Chapter Notes, Sub – headings and also the Section Notes returned a finding that the classification should be done on basis of the predominance test, that is to say, on basis of textile materials which predominate by weight over other single textile material – The tribunal noted that before adjudicating authorities it has been claimed that carpets manufactured by appellants had jute contents of 75% to 85% and the tribunal noted that “the revenue had not disputed this- The tribunal came to the conclusion that 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 predominance test – 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 – Tribunal being last authority on fact,not proper to disturb such findings of the tribunal since such findings are based on evidence – Appeal dismissed. (Paras 13 to 22)
       Facts of the Case :
        Issue in consideration in present case was regarding Classification of textile floor coverings. Respondents manufacturing non – woven floor coverings where the basic fabric is jute. Case of appellant that 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.
       Findings of the Court :
        Tribunal after discussing Chapter Notes, Sub – headings and also the Section Notes returned a finding that the classification should be done on basis of the predominance test, that is to say, on basis of textile materials which predominate by weight over other single textile material. The tribunal noted that before adjudicating authorities it has been claimed that carpets manufactured by appellants had jute contents of 75% to 85% and the tribunal noted that “the revenue had not disputed this. The tribunal came to the conclusion that 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 predominance test. 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. Tribunal being last authority on fact, not proper to disturb such findings of the tribunal since such findings are based on evidence.
        Result : Appeal dismissed.

JUDGMENT

Ganguly, J.

1. This judgment deals with Civil Appeal Nos.3758/2006, 5631/2006, 4686/2006, 5845/2006 and 5342/2007.

2. 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.

3. 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:

“......Therefore, 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 @ 30% Adv. and not as floor cov erings of jute under sub heading 5703.20 of CETA......”

4. The case of the respondents-company as disclosed in the counter affidavit is that it has relied on a technical opinion given by 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 looped surface.

5. 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.

6. The Revenue before us also did not dispute the correctness of the said opinion.

7. 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:

“Chapter-Note (1) of Chapter 57 will not determine the fact that floor cover ing is floor covering of jute or polypro pylene. 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 any change.”

8. In the ultimate finding in the said order the Adjudicating Authority came to the following conclusion:

“....In 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. The show 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. This 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 olypropylene. It only says that if the exposed surface of the article textile material, the product is treated as carpet and other t

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2009 Supreme(SC) 1550

2009(6) Supreme 576SUPREME COURT OF INDIA Ganguly, J.Commissioner of Central Excise —Appellantversus.M/s. UNI Products (I) Ltd. & Ors. —Respondents Civil Appeal No. 3758 of 2006Decided on 08-09-2009

IMPORTANT POINT It is well known that the tribunal being the last authority on fact, it is not proper for 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.

2009(6) Supreme 576
SUPREME COURT OF INDIA
Ganguly, J.
Commissioner of Central Excise —Appellant
versus.
M/s. UNI Products (I) Ltd. & Ors. —Respondents
Civil Appeal No. 3758 of 2006
Decided on 08-09-2009

IMPORTANT POINT
It is well known that the tribunal being the last authority on fact, it is not proper for 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.