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2005 Supreme(SC) 1923
SUPREME COURT OF INDIA
S. N. Variava, A.R. Lakshmanan, S. H. Kapadia, JJ.
Supreme Court Collector of Central Excise, Kanpur - Appellant
Versus
M/s. Matador Foam and others - Respondents
Civil Appeal Nos. 3832-3837 of 1999
Decided On : 05-01-2005
For the Appellant :R. Venkataramani, Sr. Advocate, G. Umapathy, P. Parmeswaran, Ashok Panigrahi, S. Gowthaman and B. Krishna Prasad, Advocates
For the Respondent:A. K. Jain, Rajesh Kumar, Rajesh Jain and Ms. Rajni, Advocates
The main legal point established in the judgment is the specificity of tariff items and the binding nature of earlier judgments, emphasizing the need for judicial discipline.
Headnote:
Customs Duty - Classification of Goods - Tariff Item 94.01 and 40.08 - Chapter Notes 1(a), 2, 2(e), 9 - H.S.N. Explanatory Note - Seats and parts thereof - Exclusion of cushions from Chapter 94 - Specificity of Tariff Item 94.01 - Judicial discipline and binding nature of earlier judgments
Fact of the Case:
The case involved the classification of goods manufactured by the respondents under Tariff Item 94.01 or Tariff Item 40.08. The goods were made of vulcanised rubber and cut to the shape of seats of motor vehicles or two wheelers. The dispute arose when the Assistant Commissioner raised a demand for differential duty and cancellation of exemption availed by the respondents.
Finding of the Court:
The court found that the goods fell under Tariff Heading 94.01 as they were specifically designed for use as seats and parts thereof, and thus excluded from Tariff Heading 40.08. The court also emphasized the binding nature of earlier judgments and the need for judicial discipline.
Issues: The main issue was the correct classification of the goods under the relevant tariff items, considering the specific design and use of the goods.
Ratio Decidendi: The court held that the goods fell under Tariff Heading 94.01 due to their specific use as seats and parts thereof, as per Chapter Notes and H.S.N. Explanatory Note. The court also emphasized the binding nature of earlier judgments and the need for judicial discipline.
Final Decision: The court set aside the impugned judgment and held that the goods of the respondents would fall under Tariff Heading 94.01. The appeals were allowed with no order as to costs.
JUDGMENT :
S.N. Variava, J.
These appeals are against the judgment dated 22nd of January, 1999 of the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT).
2. Briefly stated the facts are as follows :
The question involved is whether the goods manufactured by the respondents fall under Tariff Item 94.01 or Tariff Item 40.08. It is an admitted position that the respondent-manufactured goods made out of vulcanised rubber, other than hardened rubber, and their goods are cut to the shape of seats of motor vehicles or two wheelers. The respondents had filed a classification list showing the products under Tariff Heading 40.08. This had been approved. However, a show cause notice dated 17th May, 1990 was issued by the Assistant Commissioner raising a demand for the differential duty on the ground that the products should correctly be classified under Tariff item 94.01. After giving a personal hearing, the Assistant Commissioner confirmed the demand. Thereafter, three further show cause notices dated 31st May, 1990, 1st May, 1990 and 31st May, 1990 respectively were issued to the respondents calling upon them to show cause as to why the benefit wrongly availed of them under Notification No. 175 of 1986 dated 1st March, 1986 be not cancelled. The respondents were called upon to pay duty. After hearing the respondents, by orders dated 13th March, 1991, it was held that the respondents were not entitled to exemption. They were called upon to pay duty.
3. It must be mentioned that the Board issued a clarification that the goods of the kind manufactured by the respondents were classifiable under Tariff Heading 94.01 if they were meant for seats of motor vehicles and Tariff Heading 87.14 if they were meant for seats of two wheelers.
4. The respondents filed the appeals, which were dismissed by the Commissioner (Appeals). The respondents then filed further appeals to CEGAT. Earlier decisions of CEGAT, holding that such goods fell under Tariff Heading 94.01 were cited. In spite of that CEGAT concluded, in the impugned judgment, that such goods should fall under Tariff Heading 40.08. In so doing, CEGAT relied upon another judgment of the Tribunal which had dealt with earlier Tariff Headings 16A and 34A. It must be mentioned that those Tariff Headings were completely different from the Tariff Headings now under consideration.
Tariff Heading 94.01 and 40.08 read as follows :
"94.01 : Seats than those of heading No. 40.01), whether or not converitible into beds, and parts thereof.
40.08 : Plates, blocks, sheets, strikes, rods and profile shapes of vulcanized rubber other than hardened rubber of cellular rubber."
5. It is also necessary to consider certain Chapter Notes which have been relied upon by the parties. In Chapter 94, Notes 1(a) and 2 read as follows :
"1. This Chapter does not cover :
(a) Pneumatic or water mattresses, pillows of cushions, of Chapter 39, 40 or 63;
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. The articles (other than parts) referred to in heading Nos. 94.01 to 94.03 are to be classified in those headings only if they are designed for placing on the floor or ground.
The following are, however, to be classified in the abovementioned headings even if they are designed to be hung, to be fixed to the wall or to stand one on the other :
(a) Cupboards, bookcases, other shelved furniture and unit furniture;
(b) Seats and beds."
6. In Chapter 40, Notes 2(e) and 9 read as follows :
"2. This Chapter does not cover :
(a) . . . . . . . . . . . . . . . . . . . . . . . . .
(b) . . . . . . . . . . . . . . . . . . . . . . . . .
(c) . . . . . . . . . . . . . . . . . . . . . . . . .
(d) . . . . . . . . . . . . . . . . . . . . . . . . .
(e) Articles of Chapter 90, 92, 94 or 96;
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . ."
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9. In heading Nos. 40.01, 40.02, 40.03, 40.05 and 40.08, except as otherwise provided, the exp
