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M/s Obeetee Textiles Private Limited Versus Commissioner of Central Excise, Allahabad

2018 (2) TMI 774 - CESTAT, ALLAHABAD

Classification of goods - carpets/floor coverings - car mats, made up of felt - predominance test - whether classified under Chapter Sub-heading No.5703.20 of the CETA or under under Chapter Sub-heading No.5703.90? - Held that: - the mere fact that the surface of the carpet is polypropylene fibre, it does not cease to be jute carpets. The argument of Revenue on the basis of surface or essentially test was held to be erroneous. - Rule 3 of the Rules of interpretation of the schedule to the Act sh .....

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ontent of about 75% to 80% of jute and rest of other textile material. - Appeal allowed - decided in favor of appellant. - E/977/2010-EX[DB] - A/71905/2017-EX[DB] - Dated:- 13-7-2017 - Mr. Anil Choudhary, Member (Judicial) And Mr. Anil G. Shakkarwar, Member (Technical) Shri Atul Gupta (Advocate), for Appellant Shri Rajeev Ranjan (Joint Commissioner) AR, for Respondent Per: Anil Choudhary The issue in this appeal by the appellant a manufacturer of carpets relates to classification of their fi .....

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n question produced, in terms of Rule 3 of Interpretation Rules of CETA, 1985 read with Note 1 of Chapter 57 of the schedule to CETA, 1985, for their classification, has to be determined with respect to the exposed surface and not the ground fabric which remains on the bottom side of the goods in dispute, namely carpets/floor covering. The second issue pertains to the question as to whether the appellant is eligible to avail benefit of S.S.I. exemption under Notification No.08/2002-CE on clearan .....

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ssioner relied upon the judgment of Hon ble Supreme Court in the case of M/s O. K. Play (India) vs. CCE 2005(180) E.L.T. 300 (SC) wherein the Court emphatically observed that importance is given to the Rules of interpretation of the CETA and the functional utility, design, shape and predominant use have also got to be taken into account while determining classification of an item. The Learned Commissioner also held that the decision relied upon by the appellant in the case of CCE, Bhubaneswar-I .....

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unal. 4. Heard the parties. 5. The Learned Counsel for the appellant have pleaded that the issue is squarely covered by the ruling of Hon ble Supreme Court in the case of CCE Vs Champdany Industries Ltd., wherein it was held that the carpets manufactured are liable to be classified as jute carpets/ under Chapter Sub-heading No.5703.20 by considering the predominance test. The Apex Court took notice of the argument of Revenue, that in a case where there is some doubt relating to classification of .....

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discussed, namely the predominance test. It is not disputed by the Revenue that by the predominance test, the content of jute in the carpet is higher and more than 50%. Polypropylene fibre has also been accepted by the Revenue as the textile material falling under Chapter 55. Therefore, the mere fact that the surface of the carpet is polypropylene fibre, it does not cease to be jute carpets. The argument of Revenue on the basis of surface or essentially test was held to be erroneous. The other a .....

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most specific description shall be preferred to headings providing a more general description. However, when two or more headings, each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) Mixtures, composite goods consisting of different materials or made up .....

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of the said rules. It appears that the dominant intention in the said Rule, especially clause (e) thereof, is that the heading, which provides the most specific description shall be preferred to the heading providing a more general description. Following the said interpretation, the goods manufactured by the respondent company are to be classified as jute carpet or jute floor coverings. The Learned Counsel further points out that the said ruling of Honble Supreme Court in M/s Champadany Industr .....

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this Tribunal UNI Products India Ltd. was confirmed by the Apex Court in the appeal of Revenue, reported at 2009 (241) E.L.T. 491(S.C.). 7. Accordingly, we decide this issue of classification in favour of the appellant assessee. Following the ruling of Honble Supreme Court in the case of Champdany Industries Ltd. (supra). 8. So far the second issue is concerned regarding the S.S.I. exemption with respect to car mats made of felt and felt textile, we find the Learned Commissioner observed as fol .....

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fabric cleared for home consumption by the party during the relevant period. As a result, the value of total clearances of dutiable excisable goods by the party in the preceding financial year, naturally exceeds threshold limit of ₹ 300/- lakhs denying the party benefit of availment of S.S.I. exemption under Notification No.08/2002 dated 01/03/2002, during the relevant period. 9. We further find that the Learned Commissioner have given the data as per the show cause notice with respect to .....

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