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TMI Blog2025 (2) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... nd remanded the matter for de novo consideration. 3. Aggrieved by such portion of the order the appellant/writ petitioners have preferred this appeal. 4. It is a matter of record that the respondents have not preferred any appeal as against these findings recorded by the learned Single Bench which are in favour of the appellant, which we are required to see as to whether the case requires to be remanded for reassessment/de novo consideration or not. 5. The appellant/assessee filed refund application under Section 54(3) of the West Bengal Goods and Services Act, 2017 (the Act) of Income Tax Act, 1961 accumulated due to inverted tax structure for two different periods which are not in dispute. The adjudicating authority has noted the manufacturing process adopted by the assessee and held that the classification of Non-Woven Fabric and PPSB Bed Sheets as manufactured from the said Non-Woven Fabric is not correct and it shall file under HSN in Chapter 39. 6. With this reasoning the application filed for refund arising due to inverted duty structure was rejected. 7. Aggrieved by such order the assessee preferred an appeal under Section 107(1) of the Act before the Joint Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra-court appeal in APOT/49/2023 and the said appeal was allowed by judgment dated 28th February, 2023 after noting that as against the order passed by the appellate authority, though the assessee has an alternate remedy of filing an appeal before the Tribunal, the GST Tribunal having not been constituted, they were remediless and, therefore, they have approached the learned Writ Court challenging the said order. This Court considered the said submissions and held that a slight departure is required to be made while applying the normal principle which would be applied while considering a challenge to a classification dispute, that too, in a writ petition since the assessee does not have effective alternate remedy since the Tribunal has not been constituted. Therefore, the writ petition was allowed to be maintainable and the order dismissing the writ petition was set aside and the writ petition was restored to the file of the learned Writ Court to be decided on merits and in accordance with law. Pursuant to such order and direction, the writ petition has been heard and as observed earlier, all findings on fact and law are wholly in favour of the appellant/assessee except that portion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration. 11. Before we examine the said aspect, we shall first consider as to whether the reasoning given by the appellate authority in support of its conclusion that PPSB Bed Sheets have to be taxed at 12% is justified. As pointed out above, the assessee's submission was not accepted because under the Customs and Central Excise Tariff Act that articles `made up' Chapter 56 to 62 do not cover in Chapter 63. In this regard, we have to refer to Chapter 63 of the Tariff Act. Chapter 63 deals with other `made up' textile articles; sets; worn clothing and worn textile articles; rags. In the notes, the following has been mentioned : "1. Sub-Chapter 1 applies only to made up articles, of any textile fabric. 2. Sub-Chapter 1 does not cover : (a) goods of Chapters 56 to 62; or (b) worn clothing or other worn articles of heading 6309." 12. In terms of paragraph 1 of the notes, sub-Chapter 1 applies to only a `made up' articles to any textile fabrics. In terms of paragraph 2 of the notes, sub-Chapter 1 does not cover two categories which are mentioned in clauses (a) and (b) of which clause (a) would be relevant for the case on hand, which reads as "goods of Chapter 56 to 62; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for exemption from payment of tax in terms of Serial 3B of Schedule A to the West Bengal Value Added Tax Act, 2003. Show-cause notice was adjudicated and the department did not accept the stand of the appellant. The appellant challenged the order before the West Bengal Taxation Tribunal in RA 1310 of 2017 and the learned Tribunal by its order dated 30th November, 2018 held that the PPSB Bed Sheets manufactured and sold by the appellant were used only as bed sheets and were eligible for exemption from payment of tax under Serial 3B of Schedule A of the VAT Act. The same classification issue also arose in a proceeding initiated by the Central Excise Authorities on the ground that the classification of the final product by the appellant was incorrect and the availment benefit of exemption notification was wrong. Show-cause notices were adjudicated and an order-in-original dated 22nd December, 2015 was passed by the Commissioner of Central Excise, Kolkata-II holding that the goods manufactured by the appellant are classifiable under Chapter 39 of the Central Excise Tariff Act and confirmed the entire demand along with appropriate interest and mandatory penalty equal to the amount con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been established that the sample is composed of fibre Polypropylene. The allegation against the appellant in the show-cause notice issued by the Central Customs authorities is that Chapter 3(b) of Chapter 56 of the Central Excise Tariff Act, 1985 states that non-woven which are completely embedded in plastic or label are entirely clubbed in such material are excluded from Chapter 56 and Second Note (h) of Section XI of the First Schedule to the Central Excise Tariff Act, which also states that this section does not cover "Non-wovens, whether or not impregnated, coated, covered or laminated" with plastics or articles thereof of Chapter 39. The adjudicating authority noted that the said allegation was raised only on the basis that the impugned product is manufactured completely from 100% polypropylene. The adjudicating authority also took note of the definition of the term "Non-woven" as defined in the handbook on glossary on textile terms issued by the Bureau of Indian Standards under SP: 45-1988 and after taking note of the said definition, the adjudicating authority held that the product is Non-woven since it is composed of polypropylene fibres and merits classification under C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Commissioner of Central Excise dated 2.8.2016 had attained finality as there was no challenge made by the department to the said findings. 17. Thus, the identical issue where the appellant/assessee arose during the VAT regime as well as under the provisions of Central Excise Act and the findings were in favour of the appellant and the same attained finality. 18. Now at this distance of time, after the advent of GST regime the respondent/department was precluded from raising the identical issue that too while processing of refund claim application. 19. Thus, the attempt of the respondent department is to resurrect a settled issue which is impermissible under the law. 20. Thus, taking note of the above as held by the Hon'ble Supreme Court in Hari Bishnu Vs. Syed Ahmed Ishaque And Ors. ; (1954) 2 SCC 881, a writ of Certiorari could be issued to correct an error of law; it is essential that it should be something more than a mere error; it must be one which must be manifest on the face of record. It was also held that what is an error apparent on the face of the record cannot be defined precisely and exhaustively and there being an element of indefiniteness inherent in it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court approved the common parlance test which continues to be one of the determinative tests for classification on a product. It was held that what is important to be seen is how the customer looks at the product and what is his perception in respect of such product. The user's understanding is a strong factory in determination of classification of products. Furthermore, it is seen that in all the sale invoices where the goods were sold by the appellant to various parties it is sold as bed sheets and who in turn sell the same to hospital, railways etc. The certificates obtained from Government Hospitals and Private Hospitals were also placed before the authority. 24. That apart the revenue never disputed the classification of PPSB Bed Sheets, manufactured by the appellant under HSN 6304. In Collector of Central Excise, Meerut Vs. Kapri International Pvt. Ltd. reported at 2002 (142) ELT 10 (SC) the Hon'ble Supreme Court held that cutting the cotton fabrics from running length into small pieces brings into existence new commodities like bed-sheets, bed spreads, table cloths etc. which had a definite commercial identity in the market. That apart the cardinal rule is that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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