TMI Blog2000 (2) TMI 329X X X X Extracts X X X X X X X X Extracts X X X X ..... 784/98-D - M/s. Uni Products (I) Ltd. v. CCE, New Delhi. Appellants are manufacturers of carpets/floor coverings of jute. They sell these carpets under different names like Umang, Utsav, Tarang, Divine, Expo and Pragati. All the varieties of these carpets, according to the appellants, have one basic feature viz., the basic fabric used was made of hessian cloth. The appellants have explained the process of manufacture and the composition of the fibres used in the manufacture of their floor coverings as under : Depending upon the variety of floor coverings, either pure synthetic fibres such as polypropylene, polyester or blends thereof or even a mixture of jute and synthetic fibres are fed to the opening and blending equipment from where it is transported pneumatically to hopper feeder and then on the cards. The batt of textile fibre fed to the cards is made into a uniform web which is then cross-lapped on an apron. This web is fed to the tacker for the first stage of needle punching (mild punching). The tacker employed uses barbed needles to interlock the fibres together during the penetration of needle. This mild punching is done for the purpose of achieving a degree of integri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in the top layer in the carpet alone can be taken into account for purposes of determining the classification of the product. It was also held that the appellants had not properly determined the assessable value of the carpets for the period after 28-9-1996 when Section 4 of the Central Excise Act was amended. 7. Arguing the case of the appellants, Shri R. Swaminathan, ld. Consultant submitted that the very same issue of classification of floor coverings or carpet containing jute fabric with polypropylene surface for the period after 16-3-1995 was considered by the Tribunal in the case of Bajaj Carpet Industries Ltd. v. CCE, Meerut reported in 1999 (105) E.L.T. 235 (Tri.) = 1998 (27) RLT 342 (CEGAT) in which the Tribunal, after referring to the judgment of Hon'ble Andhra Pradesh High Court in the case of Charminar Non-wovens Ltd. v. CC CE, Hyderabad Others [1998 (25) RLT 445 (A.P)] held that the carpet containing jute and polypropylene should be classified as cloth coverings of jute even though the exposed surface contained predominantly polypropylene fibre. The appellants contend that for purposes of determining the classification, the jute contained in the basic fabric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sified as if they consisted of the material or component which gave them their essential character. The question that had to be decided was : which and what was the 'part' of the floor coverings which gave them their 'essential character'? In terms of Chapter Note 1 to Chapter 57 carpets and other textile floor coverings meant floor coverings in which textile materials serve as the exposed surface of the article when in use includes articles having the characteristics of textile floor coverings but intended for other purposes. Since the essential character of floor coverings was to be determined on the basis of exposed surface and since in the case of floor coverings manufactured by the appellants, the exposed surface was not made of jute, the carpets in question cannot be classified as 'floor coverings of jute' classifiable under Chapter sub-heading 5703.20. He submitted that the appellants' claim for classification of the floor coverings on the basis of the material predominating by weight cannot be accepted in view of the clear wording in Chapter Note 1 of Chapter 57 which would govern the determination of classification of items under that Chapter. Ld. Counsel further submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouped into several sections. Section 11 contains textiles and textile articles and one of the Chapters in this Section refers to carpets and other textile floor coverings. Note 1 in Chapter 57 reads as follows : For the purpose of this Chapter, the term 'Carpets and other Textile Floor Coverings' means floor coverings in which textile materials serve as the exposed surface of the article when in use and includes article having the characteristics of textile floor coverings but intended for use for other purposes . As can be seen from this Note at the top of the Chapter 57 it defines only the term 'carpets and other textile floor coverings' and does not deal with the manner in which a carpet made out of different textiles are to be classified. This situation is dealt in Note 2(A) in the section itself. Section 2(A) states as follows : "Products of Chapters 56 to 63 containing two or more textile materials are to be regarded as consisting wholly of that textile material which would be selected under Note 2 above for the classification of a product of Chapters 50 to 55 consisting of the same textile materials". This criterion, however, does not apply to a case where the texti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner have been rightly classified as the jute carpet falling under item No. 5703.20 by the Appellate Authority". 12. We further find that the Tribunal as in Bajaj Carpet Industries Ltd. v. CCE, Meerut [1998 (27) RLT 342 (CEGAT)] has followed the ratio of the Hon'ble Andhra Pradesh High Court in Charminar Non-wovens Ltd. and held that non-woven carpet having exposed surface of polypropylene fibre manufactured by needle punching process would be classifiable as jute floor coverings under Heading 5703.20 and not under the residuary heading of 5703.90. 13. Following the aforesaid decisions, we hold that the floor coverings of jute manufactured by the appellants would be correctly classifiable under Chapter sub-heading 5703.20 and not under 5702.90 14. Accordingly, we allow this Appeal and set aside the impugned order since the other allegations against the appellants will not survive if the classification issue is decided in favour of the appellants. Appeal Nos. E/1358 to 1360/98-D M/s. Tri Star Industries Felting (P) Ltd. v. CCE, M/s. Kanak Fibre Fabs (P) Ltd. v. CCE; and Shri Rajeev Khattar v. CCE, New Delhi. 15. The main issue raised for consideration in these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,447.78 were found to be in excess of the recorded balance which were seized. 17. On adjudication, the Commissioner distinguished the findings of the Andhra Pradesh High Court in Charminar Non-woven case relied on by the assessees by observing that the judgment of the Hon'ble High Court did not indicate that its attention had been drawn to the new sub-heading Note (2)B(i) incorporated in 16-7-1995 in the Section Note to Section XI. 18. Ld. Counsel for the appellants has argued before us that the Commissioner has failed to appreciate the meaning of the opening words where appropriate in Note 2(B)(i) of Section XI. He contends that section note 2(B)(i) which was meant to clarify Section Note 2(A) had provided that only where appropriate" Rule 3 of Interpretative Rules to the Schedule of the Central Excise Tariff Act shall be resorted to. This meant that the principle of classification under Rule 3 of the General Interpretative Rules is to be applied only "where appropriate" and not in all cases, that is, only when circumstances so warranted. It did not mean that in all cases Rule 3 was to be applied. If Rule 3 was to be applied to all products of Chapters 56 to 63, as referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the product as a whole. In the instant case the floor covering in question had been manufactured by assembling layers of non-woven material on jute fabrics. They were thus clearly in the category of products "consisting of two or more textile fabrics of different composition assembled in layers by sewing, gumming, etc." which has been described also in the HSN Explanatory Notes. The only difference was that in the instant case the layers were punched with needle instead of being joined by sewing, gumming, etc. The Commissioner had therefore, correctly applied Rule 3 of the Interpretative Rules to arrive at the classification of the item under dispute. Since the floor covering in question was mixed and consisted of different material, it was clearly covered by Rule 3 of the Rules of Interpretation and it was not a case where one heading provided a mere specific description as compared to another providing a mere general description. The essential character of the floor covering, in terms of Chapter Note 1 to Chapter 57, was to be decided on the basis of the exposed surface of the article. In the case of the floor covering manufactured by M/s. Kanak Fibre and Tristar, the expos ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
