TaxTMI 
TaxTMI 
1998 (4) TMI 497
X X X X Extracts X X X X
X X X X Extracts X X X X
....consideration relate to the classification of various items as set out in the order of the ld. lower authority as also whether the longer period of limitation was invocable in the facts and circumstances of the case and the appellants liable to penalty as levied. 3. The duty demand has been raised for misclassification of - (1) Processed and un-processed fabrics of cotton and made filament yarn and fibre, (2) Non-payment of duty in respect of one side coated fabrics, (3) Articles of Double Side Coated Fabrics, (4) Prefabricated Buildings, (5) Non payment of Auxiliary duty of Excise. The other issues that arise for consideration are the limitation period applicable in terms of Section 11A and the relevant date or provision for demand of duty i.e. whether provisions of Section 9A(5) will be applicable for demanding duty. Plea made is that the relevant date applicable would be the date on which duty was quantified. Each of the issues raised is taken for discussion separately. 1st issue : Correct classification of unprocessed fabrics of co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d use of the fabrics have already been declared to the Department. When the Central Excise Tariff Act, 1985 was brought into force, the proposed classification was called for by the department. The appellants declared to the department, the proposed description, proposed classification and declared for each type of fabrics, the name of the fabric the types of purchase manufacturers, and the end uses of such products. A.19 The following pages of the paper book have also been placed before the Commissioner in his regard. A.20 In the classification list filed in January, 1984, the classification was claimed under Tariff Item 22 describing the nature of the fabric as chafer fabrics, filter fabrics, luggage fabrics, belting fabric, impression fabric, clading shelter and giving the code numbers and also the construction of the various fabrics. (Pages 5 to 47 of Paper Book 3 containing classification lists refers). On 18-2-1986 the Inspector directed SRF to file the revised classification list consequent to the introduction of new Central Excise Tariff Act, 1985. SRF informed the Superintendent by their letter dated 21-2-1986, giving the proposed classification, proposed n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oner as a factory manufacturing industrial fabrics. It is too late in the day to allege that the Department did not know that SRF Limited, Industrial Fabric Division were manufacturing industrial fabrics. A.24 Further there was an adjudication order of the Additional Collector of Central Excise No. 24/89, dated 31-8-89 (Page Nos. 248 to 262 of Paper Book 2) wherein it has been very specifically noted that the appellants manufacture industrial fabrics in their unit at Varalimalai. The said show cause notice was issued after a detailed investigation by the Directorate of Anti-evasion, Madras. A.25 The Assistant Collector passed an adjudication order dated 7-11-89 (Pages 422 to 424) wherein among various industrial fabrics manufactured by the appellants only filter fabrics was taken up for consideration and decided that such filter fabrics would be classifiable under Heading 59.09. A.26 BONA FIDE BELIEF - The Department approved the classification lists from time to time under Chapters 52, 54 and 55 fully aware of the description of the fabric, the nature of the fabric, the types and uses, and the industry in which it is used. Further, the Central Board of Exci....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as mentioned the description of the fabrics as under : Chafer fabrics Belting fabrics Shoe upper fabrics Luggage fabrics This is in contrast to the description furnished in the classification list filed earlier i.e. in 1986 to 1992, they had simply mentioned unprocessed/ processed fabrics of man-made filament yarn and unprocessed/processed fabrics of cotton and so on. 6. We have considered the plea made by both the sides on the aspect of limitation. We had during the hearing perused the classification lists filed from time to time and also the copies of the correspondence filed in regard to the classification of the goods during the relevant period. It is seen that the jurisdictional Inspector of Central Excise by his letter dated 18-2-86 (page 387 of Paper Book filed) informed the appellants about the coming into effect of the new tariff and asking them to file revised classification list. The appellants vide their letter dated 21-2-86 (page 388 of Paper Book 2) enclosed a detailed write up giving proposed classification and nomenclature of the fabrics manufactured by them. The write up etc. as enclosed with this letter figures at pages 389 to 393. To illust....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion that non-heavy duty type fabrics are normally heat-set on a stenter. In fact, there is a large number of items produced by us which are so heat-set. As per the description given under TI. 22(1)b, these are to be treated as heat set fabrics and as much we have classified these as processed fabrics and have been paying AED as applicable while clearing these items. A list of all items which are heat set on the stenter by us, hence has been classified as PROCESSED FABRICS is given in the Annexure I. ANNEXURE I Items not dipped but only processed on stenter and hence classified as PROCESSED FABRICS under TI-22(1)b ITEM DESCRIPTION CL. NO: Sl. No. Filter Fabrics ISK - 105 10 30 " ISK - 137 10 30 SF - 338/105 20 50 SF - 118/105 22 60 SF - 398/915 20 50 SF - 118/137 22 60 SF - 120 17 35 SF - 120/102 15 21 SF - 157/105 23 66 SF - 129/102 23 66 SF - 188/91 21 54 SF - 188/102 15 21 SF - 169/102 23 66 SF - 368/97 21 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....covered are such as are specified thereunder. The said Chapter Note is reproduced below for convenience of reference : 7. Heading No. 59.09 applies to the following goods, which do not fall in any other heading of Section XI : (a) Textile products in the piece, cut to length or simply cut to rectangular (including square) shape (other than those having the character of the products of heading Nos. 59.07 and 59.08), the following only :- (i) Textile fabrics, felt and felt-lined woven fabrics, coated, covered or laminated with rubber, leather or other material, of a kind used for card clothing, and similar fabrics of a kind used for other technical purposes; (ii) Bolting cloth; (iii) Straining cloth of a kind used in oil presses or the like, of textile material or of human hair; (iv) Flat woven textile fabric with multiple warp or weft, whether or not felted, impregnated or coated, of a kind used in machinery or for other technical purposes; (v) Textile fabrics reinforced with metal, of a kind used for te....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nbsp; Heading 59.09 was analysed by the CEGAT in the Simplex Mills case and gave the following finding in para 30 of the decision. 30. The example of "articles of a kind suitable for industrial" use given are textile fabrics, combined with one or more layers of rubber, leather or other material" and that there is "bolting cloth, endless felts of textile fabrics, straining cloth". There is comma(,) after textile fabric and also after the words 'other material', and after each item 'bolting cloth' and preceding 'straining cloth'. Therefore, it cannot be presumed that these items 'textile fabric', 'bolting cloth' 'straining cloth' should be in 'cut piece' and be in only 'coated'. 9. We observe that the Tribunal in this order has in para 30 as above has clearly held that the fabrics as such are covered by the range of items as described in the Chapter Note to Heading 59.09. We observe that 59.09 is a residuary item and the scope of the heading as per the Chapter Note for this heading states 'Heading 59.09 applies to the following goods, which do not fall in any other heading of Section XI'. It is seen from the scheme of the Chapters under Section XI that Cha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he product required to be embossed before it could be used, Trimming on the trimming machine was also a requirement before seizing quality control checks. The fabrics in question he pleaded were not subjected to the above processes. His plea is that coated fabric as known in the market did not emerge. He pleaded during the relevant period an issue regarding classification of appellants goods did arise in the context of classification under heading 59.03 or 39.20 of the Tariff and Notification issued under Rule 57A under which basic Central Excise duty was exempt under Notification 217/86. Additional duty in question was however payable. He pleaded that the demand in question for the period from March, 1988 to October, 1992 raised was as it is barred by limitation as the appellant had not kept anything away from the purview of the department. By letter dated 14-9-89, appellants had finished the manufacturing process of coated fabrics which is filed at pages 332 to 334 of paper book 2. The manufacturing process as set out at page 334. COATING PROCESS OF NYLON FABRICS The coating line consists of a Let-off station, an entry accumulator, a coating head, a 3 none oven, another coa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sp; Single side coated fabrics without embossing is available in the market. (iv) Embossing is done only at the instance and requirement of the customers. (v) Even without embossing the goods are sold and hence marketable. (vi) Once the goods re-capable of being bought and sold i.e. capable of marketing, it is excisable and (vii) it side trimming is a simple process and covered under interpretative Rule 2 (a) any goods unfinished, semi-finished, incomplete, not complete, disassembled, unassembled will be classified under the heading appropriate on the goods when complete, finished or assembled. Hence, the single side coated fabrics are goods attracting excisability under Heading 5903 and Addl. Duty of Excise (GSI) is leviable. The question to be decided is whether the goods unfinished or semi-finished has the essential characteristics of the finished goods. This is decided by the Larger Bench of the Tribunal in the case of BHEL v. CC, 1987 (28) E.L.T. 545. The Hon'ble Tribunal has observed thus : "It is to be determined whether the article in question has the essential character of the complete article, has ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ithout that the goods cannot be used. This requires detailed examination taking into consideration the opinion of expert, technical literature and the nature of the goods as manufactured by the appellants. We had asked both the sides to produce evidence in this regard. We find that it has not been possible at this stage to bring on record technical opinion and nor it is feasible to get market enquiries to be caused. The evidence filed is not conclusive. It is settled position in law as held by the Hon'ble Supreme Court in a number of judgment and the judgments cited by the appellants that burden is on the department to establish marketability for levy of excise duty purposes. The appellants plea on limitation will also have to be viewed in the background of this plea apart from other circumstances. So far as the demand for the period after the receipt of the letter dated 14-9-89 is concerned the same in our view is barred by limitation inasmuch as the appellants had come on record about the manufacturing process and all stages of manufacture are mentioned therein. No mala fides or suppression of fact with intent to evade payment of duty can be attributed to them for period after....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Excise Tariff is based to show that the belting where PVC predominated by weight is covered under that heading. He pleaded on the same logic since in the case of tarpaulins the PVC predominated by weight in the fabric out of which it was made out. TI 3926.90 would cover tarpaulins also within its ambit. In this connection he also relied on the judgment of the Madhya Pradesh High Court reported in 1990 (50) E.L.T. 201 (MP), under which HDPE bags have been held to be falling under Chapter 39. He pleaded starting material in the case of HDPE bags was plastic and tapes etc. formed out of the same were woven into a fabric and which was stitched out into bags. In the present case also he pleaded the position was similar as the instead of Polyethylene the starting material was another type of plastic. He pleaded that benefit of exemption Notification 217/86 has not been allowed as the Chapter Heading 63.01 is not covered under this notification. 18. Even if the duty is held to be payable he pleaded that since the goods were consumed captively and the question of removal of goods from the factory the relevant rules for demanding duty would be 9A(5) i.e. the date on which duty is de....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f : "3926 Other articles of plastics and articles of other materials of heading No. 3901 to 3926. 6301 Made up article and when not cleared to specified including blankets other than of wood, tarpaulins, tents, sails for boat." The double side coated fabrics were cut into different sizes/shapes, the cut pieces were joined together by heat setting or welding and eyelets fixed along the sides to make it a tarpaulin/awning depending upon the requirements of the customer. Straps are also fixed if required by the Customers. In all their private correspondence inter office memo and other documents, these articles were described as Tarpaulins. Besides in the tenders floated by various Public Sector units and other customers, and participated by the appellants, the description furnished was Tarpaulin. But in all Central Excise docu ments, they have been described as Nylon covers. ARGUMENT OF THE APPELLANT : (i) When the raw material is falling under Heading 39.20 is finished article cannot falling under 6301 but only fall under 3920. (ii) &nbs....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sp; The basic raw material is fabric of man-made filament yarn. Over this fabrics, coating of chemicals and plastics is done on one side and then on the other side. In his case, the denier of the yarn is chosen with reference to the specific nature of use, they are plied and twisted again as per the specification of the customer and nature of use and then woven in flat looms. plastics are coated and the fabrics in this case is not to reinforce the chemicals and plastics. Here is a case when the plastic and chemicals are coated over the fabrics so as to protect from weather conditions, rain or sun. To illustrate, the plastic are used for coating to make it waterproof and for the longevity of the life of the article. Thus it is a fabric over which coating is done for specific purpose and it is lightly called as coated fabrics. By virtue of the predominance of weight of plastic, it cannot be considered as a plastic material and hence anything made out of these are article of plastic. The basic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....range of textile articles usually made from strong, close woven canvas. (1) Tarpaulins these are used to protect goods stored in the open or loaded on ships, wagons, lorries etc. against bad weather. They are generally made of coated or uncoated man-made fibre fabrics, or heavy to fairly heavy canvas (of hemp, jute or cotton). They are waterproof. Those made of canvas are usually rendered waterproof or ........... proof by treatment with tar or chemicals. Tarpaulins are generally in the form of rectangular sheets, trimming along the sides, and may be fitted with eyelets, cords, straps, etc. Tarpaulins which are specially shaped (e.g. for covering hay bricks, deckes of small vessels, lorries etc). Also fall in this heading provided they are flat. Tarpaulins should not be confused with lorry covers for motor cars, machines etc. made of tarpaulin material to the shape of these articles, nor with flat protective sheets of lightweight materials made up in similar manner of tarpaulins. Awnings, Sunblinds (for shops and sales etc). These are designed for protection against the sun they are generally made of strong plain or striped canvas, and may be ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....de wholly of commodity commercially known as plastics and not articles made from plastics along with other material of the contention of the petitioner that the plastic torch was covered by item 15A(2) were to prevail, one can bring any item not otherwise covered except the residuary TI. 68 by merely putting a small plastic tube in the manufacture of the items and contend that it is an article made of plastic. In the instant case it is a textile material coated with plastic and the basic character being of textile material, the coating material serving the purpose of making waterproof and thus the article are not made wholly of plastic and hence it cannot be classified under heading 3926 of the Central Excise Tariff. INVOKING OF EXTENDED PERIOD A chart showing the description furnished in the price lists, that in the classification list that in the Purchase Order, is furnished in the Annexure. As may be seen from the chart that as against the description furnished in the Purchase Order "Nylon Tarpaulin" in classification list, price list, gate passes, the same was described as Nylon fabricated covers. The copies of Purchase Orders furnished by the appellants to the d....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 39.14. In Chapter Note 1 to Chapter 39 following is set out : Throughout this Schedule, the expression plastics means those materials of heading Nos. 39.01 to 39.14 which are or have been capable, capable either at the moment of polymerisation or at some subsequent stage, of being formed of external influence (usually heat and pressure, if necessary with a solvent or plasticiser) by moulding, casting, extruding or rolling or other process into strips which are retained on removal of external influence." 27. The tarpaulins are made out of double side coated fabrics which fall under Tariff Heading 39.20. The articles made out of this are clearly not covered by the description of this Tariff item. No external aid is required so far as classification under Heading 39.26 is concerned when articles covered thereunder are such as are made out of the materials falling under Tariff Heading 39.01 to 39.14. The plea of the ld. Advocate that fabric is manufactured out of Nylon a material falling under a Tariff Heading as above and thereafter coating is also of one such material, therefore the fabric should be equated with the materials of 39.01 to 39.14 for the purpose of classific....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vied would depend upon total demand of duty after order in the de novo proceedings is passed. 31. Taking into consideration this fact, we set aside the order of levy of penalty on the appellants company for reconsideration as above. As to others in the facts and circumstances of the case and in view of what we have held above we are of the view that ends of justice will be served by the levy of penalty if any in the de novo proceedings on the company and the levy of penalty on the two appellants under Rule 209A is set aside. We order accordingly. 32. The appeals of the individuals are allowed and that of the company partially allowed in the above terms. Sd/- (V.P. Gulati) Vice President 33. [Contra per : T.P. Nambiar, Member (J)]. - I have perused the orders passed by the learned Vice-President. As far as the first issue is concerned, I agree with the orders passed by the learned Vice-president holding that the demand is barred by limitation. 34. As far as the classification issue is concerned, the learned Vice-President had held that the goods in question are classifiable under 59.09. In this connection it should be noted that the case decided b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ater circular remains in operation the Revenue is bound by it and cannot be allowed to plead that it is not valid. 14. We reject the submission to the contrary made by learned Counsel for the Revenue and in the affidavit by M.K. Gupta, working as Director in the Department of Revenue, Ministry of Finance. One should have thought that an officer of the Ministry of Finance would have greater respect for circulars such as these issued by the Board, which also operates under the aegis of the Ministry of Finance, for it is the Board which is by statute, entrusted with the task of classifying excisable goods uniformly. The whole objective of such circulars is to adopt a uniform practice and to inform the trade as to how a particular product will be treated for the purposes of Excise duty. It does not lie in the mouth of the Revenue to repudiate a circular issued by the Board on the basis that it is inconsistent with a statutory provision. Consistency and discipline are of far greater importance than the winning or losing of court proceedings. 15. The argument that the later circular has only prospective operation and that it cannot apply to these appeals because the Tribu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ton Ducks, Cotton Type Cord Fabrics and Cotton Belting Fabrics henceforth be classified under Heading 52.05 of the CET. This Circular was relied on by the appellants before the adjudicating authority. The adjudicating authority was bound to follow the Circular issued by the CBEC under Section 37B of Central Excises and Salt Act. In the decision reported in 1992 (57) E.L.T. 674 (Cal.) the Hon'ble Calcutta High Court at paras 18 and 19 held as follows : 18. In my view the principles that emerge from the aforesaid decisions read in the light of Section 37B of the Act are : (1) There is a distinction between a decision in a particular assessment by a quasi judicial authority and a decision on principle by the Board. While an instruction issued under Section 37B cannot be binding upon a quasi judicial authority under the Act, the departmental officers conducting the lis before such quasi judicial authority cannot take a stand contrary to the directive/instruction issued. (2) The instructions which may be binding on the Central Excise Officers are not binding on the Assessee who may question the correctness of the same before a quasi judicial authority and before ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... decision in Ellerman Lines Ltd. v. CIT (1971) 82 ITR 913 by the Supreme Court observing as follows at page 921 of the report : "Now, coming to the question as to the effect of instructions issued under section 5(8) of the Act, this court observed in Navnit Lal C. Zaveri v. K.K. Sen, Appellate Assistant Commissioner (1965) 56 ITR 198, 203 : 'It is clear that a circular of the kind which was issued by the Board would be binding on all officers and persons employed in the execution of the Act under section 5(8) of the Act. This circular pointed out to all the officers that it was likely that some of the companies might have advanced loans to their shareholders as a result of genuine transactions of loans and the idea was not to affect such transactions and not to bring them within the mischief of the new provision.' The directions given in that circular clearly deviated from the provisions of the Act, yet this court held that the circular was binding on the Income-tax Officer." These two decisions of the Supreme Court in Navnit Lal C. Zaveri's case [1965] 56 ITR 198 and in Ellerman Lines Ltd.'s case [1971] 82 ITR 913 were considered by this court in Bechardas Spg. & Wvg. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....by the learned adjudicating authority. Therefore in my view, though the Simplex Mills case is against the case of the appellants, still in that case the Circular in question was not dealt with by the Tribunal as the Circular was not in existence. Further it is seen that the Tribunal placed reliance in the case of Multiple Fabrics case decided by the Tribunal which was upheld by the Hon'ble Supreme Court. However, the Supreme Court had overruled this decision in the case of Fenoplast reported in 1994 (72) E.L.T. 513. In that view of the matter, I am of the view that this case requires to be remanded, to the Commissioner to decide the case in terms of the Circular issued by the Board under Section 37B and in the light of the principles laid down by the Hon'ble Supreme Court and the Calcutta High Court as well as the Gujarat High Court which are mentioned above. 39. As far as the second issue is concerned, under the impugned order the learned lower authority has demanded additional duty of excise under the Additional Duties of Excise (Goods of Special Importance) Act. In respect of one side coated fabrics which has, according to the appellants, emerged at the intermediate stag....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der to become goods, an article must be something which can ordinarily come to the market to be bought and sold. Therefore it was held that the burden is on the Revenue to show that the above said goods are capable of being marketed. The appellants have always claimed that the same are not marketable and no evidence has been placed by the Revenue to counter the claim made by the appellants that in the condition in which the one side coated fabrics emerged at intermediate stage they are marketed are known in the market. Similar view was also taken by the Hon'ble Supreme Court in the case of Bhor Industries v. Collector of Central Excise, reported in 1989 (40) E.L.T. 280. In the latest decision the Hon'ble Supreme Court in the case of UOI and Anr. v. Delhi Cloth & General Mills Co. Ltd. & Anr., reported in 1997 (92) E.L.T. 315 (S.C.) = 1997 (20) RLT 363 at para 8 held as follows : 8. Learned counsel for the appellant submitted that Tariff Entry 14AA(1) was attracted, whatever might be the further process that the calcium carbide manufactured by the respondent might have to undergo by way of purification or packaging for that would not be tantamount to further manufacture. We ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eponents of these affidavits were "not the right persons to give opinion on the type of products" with which it was concerned. 6. Regretably, the Tribunal's order under appeal shows that it was not fully conscious of the dispassionate judicial function it was expected to perform, and it must be quashed. 7. Learned Counsel for the Revenue submitted that the matter be remanded to be Tribunal so that the evidence on record may be reappreciated. As we have stated, no evidence was led on behalf of the Revenue. There is, therefore, on goods reason to remand the matter. 42. Therefore when the Revenue has not made any enquiry or has not produced any evidence and when the burden was on them to prove the same the question of remand also does not arise. Therefore in my view this demand as made in the impugned order is not sustainable and I set aside the above said demand on this behalf. 43. As far as point No. 3 is concerned, the learned Vice-President has held in the order that this issue was not contested by the appellants and the demand is to be re-confirmed. As far as this issue is concerned, it was the claim of the appellants that the classification of one....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... on this count. It is now seen that there is no dispute about the classification of double side PVC coated fabrics under Heading 39.20.12. But the Commissioner's findings is that originally the fabrics falling under Chapter 54 are now covered under Heading 59.09 when they are coated PVC on both sides by virtue of Chapter Note 2(a)(3) of Chapter 59 and they become classifiable under Heading 39.20.12. But any article made out of such double side PVC coated fabrics would still come under Heading 63.01. In order to justify this conclusion in the impugned order reliance was placed on the Explanatory Note under Heading 63.09 to contend that the Heading 63.09 can cover not only textile products but also the products made out of other materials. It was also mentioned in the impugned order that Tarpaulins is specifically mentioned under Heading 63.01 and there­fore it is classifiable under Heading 63.01. 47. But it is seen that there is no dispute about the classification of double side coated fabrics under Heading 39.20.12. This heading reads as under : "Other plates, sheets, film, foil and strip, of plastics, non-cellular, whether lacquered or metallised or laminated, suppo....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Chapter Notes and Explanatory Notes to Chapter 39 and held that the composite goods containing plastics and textiles and the articles made of the composite goods consisting of plastic and other materials like textiles would come under Heading 3926. The same view was taken by the Tribunal in the case of Eagle Flask Industries Pvt. Ltd. v. Collector of Central Excise reported in 1991 (53) E.L.T. 65. It is therefore seen that Section Note 1(d) of section 11 specifically states that the whole of section 11 cannot be covered fabrics, impregnated, coated, covered or laminated with plastics. The second portion of interpretative Rules makes it clear that the interpretative rules cannot be used to classify product under a chapter against the Chapter Note prohibiting classification under that heading. In this case the Tarpaulins and articles of plastics in question are made by coating PVC compound on both sides of nylon fabrics. Nylon fabrics were made out of nylon strips. Thus the resin and nylon falling under Heading 39.08 on being drawn into filaments and is made into fabrics was classifiable under Heading 54.08 of coated on both sides with PVC compound the classification of such double ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Whether the matter requires to be remanded to the Commissioner to decide the case in terms of the Circular issued by the Board under Section 37B and in the principles laid clown by the Hon'ble Supreme Court and High Court of Gujarat as mentioned in para 38 of the orders passed by Member (Judicial); (ii) Whether in the facts and circumstances of the case, as per issue No. 2 whether the matter requires to be remanded for de novo adjudication in respect of the period prior to 14-9-1989 and in the light of the observations mentioned in the order passed by the Hon'ble Vice-President including the question of limitation, as held by the Hon'ble Vice-President; (OR) Whether the demand in this regard is not sustainable and is liable to be set aside as held by Member (Judicial); (iii) Whether in the facts and circumstances of the case, as per issue Nos. 4 and 5, whether the goods in question are to be classified under Heading 63.01 as held by the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ioner, a representation from the trade had been made to the Central Board of Excise and Customs (CBEC) and the CBEC after due consideration issued an order under section 37B. Following the said order, Nagpur Collectorate issued a Trade Notice dated 8-12-1993 and an parallel Trade Notice was issued by Rajkot Collectorate No. 56/93, dated 1-12-93. The said Trade Notice had been extracted in para 36 of the order. The appellants had specifically contended before the Commissioner in terms of this Circular issued by the Board under Section 37B of Central Excise Act, the classification is required to be adopted under Hearing No. 52.05 of the Central Excise Tariff. Specific arguments were also raised before the Commissioner. However, the Commissioner has not dealt with this point and to that extent the order on this point is silent and non-speaking. The ld. Vice President has also not expressed his opinion on this point but has proceeded to deal with the classification issue and held the same to be classifiable under Chapter 59. However, the ld. Member (J) has not expressed any opinion on the classification but has held in para 35 after relying on one judgment of the Hon'ble Supreme Court ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rent opinion and has held that cotton duck not having technical use, shall hence forth be classified under Chapter 52 of Central Excise Tariff, while all other items they have suggested under Chapter 59.11 or under Heading 59.10 subject to Note 6 to Chapter 59. 63. The ld. Counsel submitted that for the relevant period the matter is required to be guided by Trade Notice 62/93 and the Board Circular dated 17-4-97 does not have a retrospective effect in view of the Supreme Court judgment in the case of H.M. Bags Manufacturer v. CCE reported in 1997 (94) E.L.T. 3 (S.C.). 64. All these aspects of the matter are left open to the Commissioner for determination on remand. Hence I agree with the proposition of ld. Member (J) for remand of the matter on the first issue. 65. As regards the issue No. 2 pertaining to the classification of one sided cotton fabrics ld. Vice-President in para 13 has observed that : "We observe the question to be answered is whether embossing changes the character of the product in a manner to render it usable and without that the goods cannot be used. This requires detailed examination taking into consideration the opinion of expert, te....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... opportunity has been given to the department to produce evidence and they have not produced any conclusive one during the course of proceedings. If that be the case, the only conclusion that has to be arrived is that the department has not discharged the onus and hence the benefit should go to the party instead of remanding the matter for collection of evidence which is against the spirit of the judgments rendered by the Supreme Court. 69. As regards limitation, I agree with the view expressed by Member (J). 70. As regards the issue No. 3, there is no contest made by the party and there is no difference of opinion and hence, there is no question of my deciding the same. 71. As regards the issues 4 and 5, the same deals with classification of articles of double side coated fabrics. This particular item had been assessed under Chapter Heading 39.26 as articles of plastics. However, the department issued show cause notice for reclassifying the same under Chapter Heading 63.01. The ld. Vice-President has held the item is to be classified under Chapter Heading 63.01, while the ld. Member (J) has held the article to be classifiable under Heading 39.26 of the Tari....