2009 (9) TMI 8 - SC - Central Excise

Supreme Court affirms 'jute carpet' classification for non-woven carpets under sub-heading 5703.20

The Supreme Court upheld the classification of non-woven carpets under sub-heading 5703.20 as 'jute carpet' for duty rate determination. The Court ... Carpets – classification - non-woven carpets - whether non-woven carpets having exposed surface of polypropylene are classifiable under heading 5703.20 as 'jute carpet' to justify concessional rate of duty or whether the said non-woven carpets are classifiable under heading 5703.90 as 'other carpets” – Held that - Revenue's case has been constantly rejected at all the three levels, namely, in the adjudication order passed by the Addl. Commissioner of Central Excise, in the appellate order passed by the Commissioner (Appeals) and in the Tribunal. - Such decisions have been rendered on the basis of the relevant materials and after analyzing the evidence on record as also the provision of Section Notes and Chapter Notes. - Such concurrent findings by the lower authorities are interfered with by this Court in exercise of its jurisdiction under Section 35L of Central Excise and Salt Act, 1944 only when such findings are patently perverse or are based on manifest misreading of any legal provision. Here none of these situations is present. – revenue’s appeal dismissed. Issues:1. Classification of non-woven carpets under heading 5703.20 as 'jute carpet' or under heading 5703.90 as 'other carpets' for duty rate determination.Detailed Analysis:The main issue in this appeal before the Supreme Court was the classification of non-woven carpets with an exposed surface of polypropylene under the Central Excise Tariff Act, 1985. The question was whether these carpets should be classified under heading 5703.20 as 'jute carpet' to avail a concessional rate of duty or under heading 5703.90 as 'other carpets.' The Revenue contended that the concessional rate of duty was only applicable to jute exposed surface floor coverings, alleging mis-classification by the respondent and mis-utilization of certain notifications. The respondent, a manufacturer of blankets, carpets, and floor coverings, argued that their products known as 'Charms Jute Floor Coverings' should be classified under specific sub-headings based on the predominance of jute content by weight.The adjudication process involved a detailed examination of the manufacturing process and the composition of the goods in question. The adjudicating authority, after considering various factors, including past decisions and physical examination of the goods, concluded that the non-woven carpets in question were correctly classified under sub-heading 5703.20 as they were manufactured by a needle-punching process and had a predominance of jute content by weight. The authority relied on precedents and held that the process of manufacture was similar to a previous case, leading to the dropping of show-cause proceedings against the assessee.The appeal filed by the Revenue against the adjudication order was rejected by the Commissioner of Customs and Central Excise (Appeals), who concurred with the classification under sub-heading 5703.20 based on the manufacturing process and composition of the goods. The appellate authority also referenced a relevant decision by CESTAT to support its findings.Subsequently, the Revenue's appeal was taken to the Tribunal, which referred to a previous decision and upheld the classification under sub-heading 5703.20. The Tribunal noted that similar issues raised by the Revenue had been previously discussed and rejected in other cases. The Tribunal's decision was based on a detailed analysis of the relevant legal provisions and evidence on record, leading to the rejection of the Revenue's contentions.The Supreme Court, in its judgment, relied on established legal principles and precedents to dismiss the Revenue's appeal. The Court emphasized that interference with concurrent findings of lower authorities in classification matters is warranted only in specific situations, such as when the findings are patently perverse or based on a manifest misreading of legal provisions. Since none of these situations were present in the case at hand, the Court found no merit in the Revenue's appeal and dismissed it, following the settled law on concurrent findings of fact in classification disputes.