2015 (11) TMI 963 - SC - Central Excise

CESTAT Upheld Classification of Floor Coverings with Plastic Lamination | Exemption Notification No. 6/2000-C.E.

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the classification of floor coverings with plastic lamination by M/s. SPL ... Classification of goods - jute products or products of plastic - Whether the floor covering with plastic laminated on both side manufactured and cleared by M/s. SPL Siddhartha Limited [for the period from 31.05.2000 to 17.01.2005] should be classified under sub heading 3918.90 of the Central Excise Tariff Act, 1985 and accordingly, charged to the Central Excise duty @ 16% ad valorem along with appropriate interest or not - Held that:- It is clear that the products are dominantly jute products and they cannot be treated as products of plastic. Therefore, there is no question of their coverage under Chapter Heading 39. On the other hand, we find that the Entry which is more proximate to get the aforesaid product covered appears to be 59.04 which, inter alia, covers the product that is floor coverings consisting of a coating or covering applied on a textile backing. Product which is floor covering is made of jute and plastic coating is applied thereupon. - in the amendment made to the sub-Headings in Entry 59.04 in the year 2005, the product in question is described with more clarity inasmuch as Entry 5904.90.10 is described as 'Floor coverings with jute base”. There is no dispute that in the instant case, the product is a floor covering with jute as its base. - order of the CESTAT does not call for any interference - Decided against Revenue. Issues:Classification of floor coverings with plastic lamination by M/s. SPL Siddhartha Limited under Central Excise Tariff Act, 1985 - Chapter Heading 3918.90 vs. Chapter Heading 59.03.Analysis:The case involves a dispute regarding the classification of floor coverings manufactured by M/s. SPL Siddhartha Limited, specifically focusing on products laminated with plastic on both sides and products laminated with plastic on a single side. The Department argues for classification under Chapter Heading 3918.90, while the assessee contends that they should be classified under Chapter Heading 59.03. The manufacturing process involves jute fabrics, bitumen, polyethylene chips, and master batch, where plastic lamination is applied to the jute fabric. The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) accepted the assessee's claim, emphasizing that the products are primarily jute-based and not plastic products. The Tribunal found that the products fall under Chapter Heading 59.04, which covers floor coverings with a coating on a textile backing, aligning with the jute-based floor coverings in question.The Tribunal's decision is supported by the manufacturing process, highlighting the dominance of jute in the final product and the application of plastic as a coating. The subsequent amendment in 2005 further clarifies the classification under Entry 5904.90.10 as 'Floor coverings with jute base,' confirming the nature of the product in question. The judgment affirms that the products are rightly classified under Chapter Heading 59.04, emphasizing the jute base of the floor coverings. The order of the CESTAT is upheld, dismissing the appeal against the classification decision.Regarding the duty implications, the Tariff Entry prescribes a 16% duty rate. However, the assessee points out Exemption Notification No. 6/2000-C.E., which specifies nil duty for the product in question. The judgment does not interfere with the classification decision and affirms the exemption from duty as per the relevant notification. Ultimately, the appeal is dismissed, maintaining the classification of the floor coverings with plastic lamination under Chapter Heading 59.04 and confirming the exemption from duty as per the applicable notification.