2018 (2) TMI 774

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....rtment have to be correctly classified under Chapter Sub-heading No.5703.90. 2. The contention of the Department in the impugned order is that the appellant manufactures carpets which are made with ground fabric of jute and exposed surface of different synthetic textile material. That the essential character of the carpet in question produced, in terms of Rule 3 of Interpretation Rules of CETA, 1985 read with Note 1 of Chapter 57 of the schedule to CETA, 1985, for their classification, has to be determined with respect to the exposed surface and not the ground fabric which remains on the bottom side of the goods in dispute, namely carpets/floor covering. The second issue pertains to the question as to whether the appellant is eligible to a....

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.... notice. Being aggrieved the appellant assessee is in appeal before this Tribunal. 4. Heard the parties. 5. The Learned Counsel for the appellant have pleaded that the issue is squarely covered by the ruling of Hon'ble Supreme Court in the case of CCE Vs  Champdany Industries Ltd., wherein it was held that the carpets manufactured are liable to be classified as jute carpets/ under Chapter Sub-heading No.5703.20 by considering the predominance test. The Apex Court took notice of the argument of Revenue, that in a case where there is some doubt relating to classification of the goods, the essential characteristic of the goods will have to be looked into. Relying on this concept of essentiality test, Revenue had argued that as the expos....

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....y of the materials or substances contained in mixed or composite goods or to part only of the items in a set, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable. (c) When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in the numerical order ....

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....th respect to car mats made of felt and felt textile, we find the Learned Commissioner observed as follows: - "The second issue raised in the instant show cause notices issued by the department is also having an important linkage with the first issue discussed in the foregoing para. As a necessary fall out of the impugned goods of the party i.e. textile floor covering, being classified under Chapter Sub-heading No.5703-90, entire quantity of these textile floor covering become chargeable to appropriate rate of ad valorem - Central Excise duty along with the quantities of car mats of felt and felt fabric cleared for home consumption by the party during the relevant period. As a result, the value of total clearances of dutiable excisable goo....