2015 (9) TMI 1152 - SC - Central Excise

Supreme Court upholds Department's product classification under Central Excise Tariff Act.

Commissioner of Central Excise, Panaji Versus M/s. M.R.F. Ltd.

The Supreme Court overturned the CESTAT's decision and upheld the Department's classification of products under the Central Excise Tariff Act. The Court ... Classification of (1) Dipped Tyre Cord Warp Sheet and (2) Rubberised Tyre Cord Warp Sheet - Classification under Chapter Heading 4005.90 or under Chapter Heading 5902.10 - Commissioner (Appeals) allowed the appeal on the ground that the case was covered by the judgment of the Tribunal in 'MRF Ltd. v. CCE, Goa & Chennai' [1998 (7) TMI 230 - CEGAT, MADRAS] - CESTAT upheld the order observing that the aforesaid judgment of the Tribunal has been upheld by this court in 'CCE, Goa & Chennai v. MRF Ltd.' [2005 (1) TMI 110 - SUPREME COURT OF INDIA]. - Held that:- observations of the CESTAT are incorrect inasmuch as this Court in MRF case (supra) had remitted the case back to the Commissioner and had not decided the appeal in favour of the assessee. Be that as it may, we are of the opinion that in the instant case, it is not even necessary to remit the case back because of the reason that the classification as made by the Department has been accepted by the assessee and the assessee is even paying the duty on the basis of the said classification. - Decided in favour of revenue. Issues: Classification of products under Central Excise Tariff ActClassification of Products:The case involved the classification of two products, Dipped Tyre Cord Warp Sheet and Rubberised Tyre Cord Warp Sheet, under the Central Excise Tariff Act. The assessing authority initially classified the first item under Heading 5902.10 and the second item under Heading 5906.99, charging duty accordingly. The respondent-assessee had previously claimed classification under Chapter Heading 5902.10 but was reclassified under Chapter Heading 4005.90.Appeals and Tribunal Decisions:The respondent appealed the initial classification before the Commissioner of Central Excise (Appeals), who allowed the appeal citing a previous Tribunal judgment in 'MRF Ltd. v. CCE, Goa & Chennai.' Subsequently, the Department appealed to the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), which dismissed the appeal, referencing the Supreme Court judgment in 'CCE, Goa & Chennai v. MRF Ltd.' The CESTAT's decision was based on the understanding that the Supreme Court had upheld the Tribunal's judgment in favor of the assessee.Supreme Court Decision:The Supreme Court, comprising Mr. A.K. Sikri and Mr. Rohinton Fali Nariman, JJ., found the CESTAT's observations to be incorrect. The Court noted that in the 'MRF Ltd.' case, the Supreme Court had remitted the case back to the Commissioner without deciding in favor of the assessee. However, in the present case, the Court deemed it unnecessary to remit the case back due to the assessee's acceptance of the Department's classification and payment of duty based on that classification. Consequently, the Court set aside the CESTAT's order and upheld the classification determined by the Department, thereby allowing the appeal in favor of the Department.In conclusion, the Supreme Court's judgment clarified the classification issue, emphasizing the importance of the assessee's acceptance of the classification and payment of duty based on the Department's determination. The decision highlighted the specific circumstances of the case, distinguishing it from previous tribunal and Supreme Court judgments, ultimately upholding the Department's classification of the products under the Central Excise Tariff Act.