TMI Blog1989 (9) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... Chapter sub-head. 5406.90 and fabrics thereof under Chapter heading 5408.00. It has further been held that the provisions of Notification No. 223/86-C.E., dated 3-4-1986 are no longer applicable as the term sacks produced on circular looms is nothing but sacks produced out of fabrics manufactured on circular looms. As such they are required to pay duty under Chapter 63.01 at 12 per cent ad valorem. The petitioners have filed appeals against the order of the Assistant Collector before the Collector (Appeals) Central Excise, New Delhi. But in the meanwhile, pending the decision of the appeals, they have filed this writ petition. 2. This Court, vide its order dated 1-12-1988 directed the Collector Appeals to dispose of the appeals expeditiously, preferably within a period of four months and after the disposal of the appeals copy maybe filed before this Court. This Court had followed the procedure adopted by a Division Bench of the Gujarat High Court in Special Civil Application No. 4604 of 1987 filed by M/s. Arms Polymers Ltd, Ahmedabad. Accordingly, later on the order of the Collector Appeals was passed and after perusing the same the matter was finally heard by this Court. 3. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e trade meaning of the commodity concerned has to be accepted. Recent judgments of the Supreme Court have been cited in support of the contention. It has also been pleaded that when any entry is subject to two interpretations, then the interpretation favourable to the petitioner has to be accepted. Therefore, the petitioners have prayed for quashing of the order of the Assistant Collector, Central Excise as confirmed by the Collector, Appeals of Central Excise with a further prayer that the HDPE sacks be classified under Chapter 39 of the Central Excise Tariff Act, 1985. 4. The respondent No. 4 has filed return and resisted the petition on the ground that this petition has been filed without exhausting the other channels available for redressing the grievance under the Central Excise Law. The petitioners instead of filing a petition before this Court should have filed an appeal before the Central Excise Gold Appellate Tribunal as has been provided by the Central Excise Act. Therefore, in view of the availability of alternative remedy itself this petition deserves to be dismissed. 5. On merits it has been stated that originally there was no controversy of classification because ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the representation of the petitioners. Similarly Note No.10 to Chapter 39 makes it abundantly clear that the expression 'strip' amongst others appearing in Heading No. 39.06 also include HDPE and PP as defined in Note No. 2(D) to S. XI. Thus, a strip of synthetic textile material of an apparent width not exceeding 5 mm is correctly classifiable under sub-head. No. 5406-90. In respect of strip/tape the width thereof is the sole criteria which determines its classification. Therefore, the contention of the petitioners that irrespective of the width of the tapes the HDPE/PP tapes should be classified under Heading 39.20 is not correct. 7. Similarly from Note No.l to Chapter 46 also it is clear that woven slacks of plastic strip of apparent width exceeding 5 mm are classifiable under Heading 46.01 and not under Heading No. 39.23. It is also evident from Note No. 2(i) to Chapter 39 that this chapter does not cover plait, wicker work or other articles of Chapter 46. Similarly Note No. 1(c) to S. 11 also clarifies that S. 11 does not cover plaits or fabrics and other basket and wicker work of strips and like of an apparent width exceeding 5 mm since it falls under Chapter 46. As su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, the petition should be dismissed. 8. The learned counsel for the petitioner Shri A.M. Mathur has strenuously urged that in view of the fact that the impugned order of the Assistant Collector, Central Excise has been passed in violation of the clear provisions of law and the judgments of the CEGAT and the Circular of the Board of Direct Taxes, it is manifestly illegal and such an order can be challenged directly before the High Court in a writ petition without availing of the alternative remedy. However, the petitioners also took a chance to approach the Collector Appeals, but the order of the Collector Appeals itself goes to show that the order has been passed in routine without the application of mind to the points raised by the appellants and without taking into consideration the documents and earlier judgments of the CEGAT. Therefore, it is a fit case wherein the Court should invoke its jurisdiction under Art. 226/227 of the Constitution of India. In support of his arguments on this point Shri Mathur has placed reliance on various authorities of the different High Courts and the judgment of the Supreme Court in the case of A V. Venkateswaran, Collector of Customs, Bombay v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t recourse may be had to Art. 226 of the Constitution, then only the Court should interfere under Art. 226. But where the petitions are filed solely for the purpose of obtaining interim relief and thereafter prolong the proceedings by one device or other, the practice needs to be strongly discouraged. 11. In the instant case, as observed above, the order of the Assistant Collector has been challenged by the petitioner not only on the ground that he has wrongly exercised his discretion, but on the ground that the order is manifestly illegal in view of the two decisions of the Central Excise Gold Appellate Tribunal, which is the final authority for the Department and the verdict of which has to be followed and furthermore the view taken by the Tribunal has been upheld by the Supreme Court and the Adjudicating Authority has just brushed aside the judgments by saying that in view of the new Tariff Act they have no relevance, whereas the judgments clearly state that the HDPE tapes and goods made therefrom are goods of plastic. As such the order on the face of it being against the order of the Apex Body of the department and confirmed by the Supreme Court, the learned Adjudicating Auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Board directives, the judgments passed by the highest authority of the Department have been ignored by the authorities concerned. Therefore, also the order is illegal. When there is a specific entry about the item in question, the general entry cannot be used by the Department and the fact that the HDPE tapes of the petitioners fall under entry No. 39.20 is also supported by the Notification issued by the Government itself. As such the orders impugned are manifestly illegal based on incorrect interpretation of the entry and ignoring the earlier decisions which have achieved finality in the matter. 14. On the other hand the learned counsel for the Revenue Shri Neema has vehemently argued that the earlier decisions of the CEGAT and confirmed by the Supreme Court are of no avail to the petitioners. The various explanations and the clauses of S. XI of the Tariff Act clearly go to show that the classification has to be based, in the instant case, on the width of the strip. If the strip is of the width of 5 mm then the classification shall be under S. XI and the different entries under the Schedule to that section. However, if the stip is over 5 mm in width, then of course the plea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic and, therefore, in view of the aforesaid position and the popular meaning or the trade, it was held that since in their own right the HDPE sacks remain an article made of plastics, they should fall in Item 15A(2) and the classification of the intermediate stage product, i.e. HDPE woven fabric, was of no consequence. 16. Similarly the CEGAT Special Bench in the case of Shree Radhe Industries, Kalol v. Collector of Customs and Central Excise, Ahmedabad (1983 E.L.T. 379) has held that since the HDPE tapes are neither man-made filament yarn nor cellulosic spun yarn, therefore, they do not fit into any category of Item 18 of CET. HDPE is a well known plastic raw material, therefore, tapes made from this material would be covered as articles made of plastics. This decision of the CEGAT was taken to the Supreme Court by the Union of India, but the appeal was dismissed on merits in CA. No. 8369 of 83 dated 21-10-1983. Thereafter the Government of India issued Circular 32/85 -A.U. dated 20th November, 1985. In the Circular it was said that the Board had decided that HDPE woven sacks should be considered as articles of plastic and that the Tribunal's decision in Shellya Industries v. Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar geometric shape, whether or not..........". Similarly in Note No. 2(D) of Section XI it has been specified that throughout this Schedule, 'man-made fibres' means staple fibres and filaments of organic polymers produced by manufacturing process, either - (i) By polymerisation of organic monomers, such as polyamides, polyesters, polyurethanes or polyvinyl derivatives; or (ii) By chemical transformation of natural organic polymers (for example, cellulose, casein, proteins or algae) such as viscose, rayon, cellulose acetate, cuporo or alginates. It has further been stated that the term man-made synthetic used in relation to fibre means synthetic fibres as defined at (i) artificial fibres as defined at (ii) and the terms man-made, synthetic and artificial shall have the same meanings when used in relation to textile material. 18. Now in view of the aforesaid tariff entries and the finding that basically the HDPE tapes and the sacks are goods of plastic, it has to be seen whether the HDPE will fall under sub-heading 5406.90 because of the aforesaid provisions in the Tariff Act. Now first of all let us examine Note 1(c) of Section XI. This proviso excludes the monofilament of 1 mm st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rayon, nylon and the like." "Textiles" has been defined in S .2(g) as under: "textiles" means any fabric or cloth or yarn or garment or any other article made wholly or in part of - (i) cotton; or (ii) wool; or (iii) silk; or (iv) artificial silk or other fibre, and includes fibre;" Therefore, according to the above definition, any fabric or cloth or yarn or garment if made wholly or in part of cotton, wool, silk, artificial silk or other fibre shall be called textiles. The definition of 'fibre' includes the regenerated cellulose, rayon, nylon and the like. Nowhere in the aforesaid definition of 'fibre' or 'textiles' plastic has been mentioned as a commodity to be included in the definition of 'fib e' or 'textiles'. Now in the Shree Radhe Industries case (supra) and the Shellya Industries case (supra) irrespective of the entries in the tariff as prevailing then, it has been held that the HDPE sacks are articles made of plastic; they are made of high density polyethylene which is a plastic raw material and it has further been held that they are not man-made filament yarn but are articles of plastic. The Circular of the Central Board of Direct Taxes dated 20-11-1985 al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he finished goods i.e. the HDPE woven sacks are also known in the common parlance as plastic woven sacks, then it cannot be held that the strips with which such bags are woven are the strips of synthetic textile material. 20. Thus, the view of the Textile Commissioner as discussed above, the registration by the DGTD of the factory of the petitioner, the definition of 'textile' and 'fibre' as discussed above, the process of the manufacture of the HDPE tapes, the earlier judgments of the CEGAT approved by the Supreme Court and accepted by the Department, all clearly go to show that the HDPE bags are the bags woven by the plastic strips and they, therefore, are goods of plastic and the material used for weaving those bags being the strips of plastic made from plastic granules, the strips of plastic used for weaving the aforesaid HDPE woven sacks has to be classified as an Item under entry 39.20 of Chapter 39 and not under entry 54.06 of Chapter 54. Accordingly the entries of the finished goods have also to be made under the proper Chapter of the Tariff Act treating them as the finished goods made of plastic strips. 21. In the result we hold that HDPE strips or tapes fall under the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
