TMI Blog2001 (4) TMI 316X X X X Extracts X X X X X X X X Extracts X X X X ..... t Rs. 78,79,908.75 without payment of duty of central excise amounting to Rs. 21,95,458.77 as per the particulars given below - Year Value 1995-96 Rs. 23,73,893 1996-97 Rs. 26,46,114 1997-98 Rs. 22,00,267 1998-99 Rs. 6,59,635 In this connection, the statement of Smt. Jyotsna Sharma, Proprietress of the party, was recorded on 11-9-1998 and 17-9-1998. In her statements, she deposed that they were manufacturing car mattings since 20-8-1995 with the raw material i.e. non-woven (needle loom felt) which was procured from M/s. Sirsa Felts, Sirsa and other such parties and rest of the raw materials (floor covering) had been purchased from M/s. Kanak Fibrefeb (P) Ltd., Gurgaon, and M/s. Bajaj Carpet Ltd., Noida, and that the raw materials received by them was classified under Chapter Sub-headings 5703.20 and 5703.90. 2. Further from the scrutiny of the records/documents of the party, it was learnt that they had been procuring the raw material i.e. polyester non-woven fabric (needle loom felt) textile floor covering from various manufacturers under invoice with the following descriptions Textile Fl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... table commodity, will amount to manufacture. He has observed that in the instant case floor coverings are cut to specific sizes (depending upon the type of vehicle) and is also subjected to the process like stitching, sizing, overlocking, etc. The end-product is solely and specifically designed for a car and is different from the original floor coverings in name, character or use. He has, therefore, observed that making of car mattings and other mattings out of floor coverings of Chapter 57 brings out a different excisable commodity into existence having different name, character or use and is also marketable. Therefore, there is manufacture involved in this case and party s contention that no new excisable commodity comes into existence is not acceptable. 6. With regard to the classification of the car mattings and other mattings, the Commissioner in his order observed that in terms of Rule 3(a) of the Rules of Interpretation of the Central Excise Tariff Act, 1985, the classification is to be determined in a heading which gives more specific description of the goods. The use of car mattings is to cover the floor of the car. As carpets/floor coverings along with its made-ups ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, for the appellants and Dr. Ravinder Babu, JDR, for the respondents. The learned Consultant for the appellants has submitted that the process of cutting to size, stitching edges of duty paid floor coverings does not bring into existence a new commodity, taxable under the very same Sub-heading No. 5703.90. He has relied on the decision in the case of Trans-Asia Carpet Ltd. v. CCE, 2000 (116) E.L.T. 135 (T), wherein it is held that the process of cutting and stitching of duty paid carpets for use in cars did not amount to manufacture of excisable commodity. It is further contended that the finished products have been classified under Heading No. 5703 which reads as other carpets or other textile floor covering whether or not made up . It is stated that the notice treats their finished products as other textile floor covering . It is stated that the expression whether or not has been interpreted by the Hon ble Apex Court in the case of Prabhat Sound Studio v. Addl. Collector of Central Excise, 1996 (88) E.L.T. 635 (S.C.), wherein it has been held that the use of said expression does not mean that a single activity like recording of duty paid cassette would amount to manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aced under sub-heading No. 5703.90 of the Schedule to the Central Excise Tariff Act, 1985 by the Department. It is contended that the party procured the duty paid raw material i.e. textile floor coverings under the proper invoices with the description Textile Floor Covering of Jute falling under sub-heading No. 5703.20. It is contended that the conversion of one item falling under Heading No. 5703 to another item falling under the same heading does not amount to manufacture and, therefore, no duty is liable to be paid on the goods manufactured by the appellants. The Commissioner in his order has given the details of the manufacturing process undertaken by the appellants. He has stated that the appellants are buying textile floor coverings (non-woven and in roll form) and the manufacturing process involves cutting to required/specified size, stitching, sizing, overlocking, etc., and the newly emerged final product is known under different names in the market. The product emerging is car matting/other mattings. The Commissioner in his order has also relied on the HSN Explanatory Notes given at page 783 under Chapter 57 to which no reference is made by the learned Consultant of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roducts which was the subject matter of consideration in that case. Under these circumstances, the observation of the Tribunal that the conversion of carpets into rugs and the conversion of rugs into smaller carpets do not constitute manufacture can only be taken as an obiter and not as a point in issue determined in that case. In view of these findings, therefore, we hold that the process under consideration amounts to manufacture and the end-products are correspondingly liable to duty. 12. The next point for consideration is the classification of the products so emerging as a result of the above stated process of manufacture. It is observed from the order-in-original that during the period from 1995-96 to 1998-99 the end-products totally amounting to Rs. 71,35,892/- were floor mats of cars. Therefore, in terms of above mentioned decision in the case of CCE, Bombay-II v. Sterling India, supra, these would be classifiable under Heading No. 8708. The rest of the goods amounting to Rs. 7,44,017/- manufactured during this period would be classifiable under Heading No. 5703.90 and we hold accordingly. We further hold that since the noticee party had neither ever applied for any regis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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