TaxTMI 
TaxTMI 
TaxTMI 
2006 (3) TMI 169
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....y his Order No. 52/92 dated 20-8-1992. 4. By a Board Circular addressed to all Collectors of Central Excise dated 10-8-1988 clarification was issued that the goods were classified under Chapter 52. Subsequently by Order No. 10/93 dated 5-11-1993 the Central Board of Excise & Customs classified the goods under Chapter 52. Based on this Circular, the goods have been allowed to be cleared. In the above circular/order No. 10/93, dated 5-11-1993, reference is made to proceeding initiated by M/s. Simplex Mills Company Limited v. Union of India, wherein the Tribunal held that grey cotton, grey cotton canvas, belts and duck were classified under heading 59.09 as industrial products. As the matter went against the assessees it was taken up to the Supreme Court. In the mean while, Circular No. 10/93 which was in favour of the assessee, came into force. The appeal filed by the assessee before the Supreme Court was withdrawn based on the circular. Subsequently, the present impugned order/circular dated 17-4-1997 came to be passed under Section 37B of the Central Excise Act, the classification was sought to be once again revised. The relevant portion of the circular is extract here under: "7.....
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....would draw the attention of this Court to a decision reported in 2001 (130) E.L.T. 446 (Tri.-LB) [Jyoti Overseas Ltd v. Commissioner of Central Excise, Indore] wherein a similar issue regarding the classification of the goods, which all the subject matter of the present petition, was considered. 11. In Simplex Mills Co. v. Collector of Central Excise, Nagpur - 1993 (49) ECR 147, this Tribunal interpreted the scope and ambit of Chapter Heading 59.09 as it stood at the relevant time. While analysing that Chapter Heading, this Tribunal lost sight of Note 7 to Chapter 59. Had the sub-heading 5909.00 been examined in the light of Note 7 to Chapter 59, the conclusion would have been entirely different. When the Chapter Heading 59.11 is examined in the light of Note 7 to Chapter 59 as has been done in the earlier paragraph, we are clear in our mind that the conclusion reached by the Bench in 1993 (49) ECR 147 is unsustainable. We accordingly hold that the said decision can never be treated as one laying down correct law. Two co-ordinate Benches of this Tribunal in Madura Coats Ltd. v. Collector of Central Excise, Madras - 1999 (106) E.L.T. 213 (decided on 1-7-1998) and Simplex Mills Co. ....
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....nder question. In para 5 of the said order, the very same Circular of the year 1997 issued by the Department which contended that the classification should be under Chapter 59 was negatived by the Supreme Court, in the following manner. "5. In the meanwhile, not only had the respondent challenged the decision of CEGAT in Simplex I before this Court but also on 5th November, 1993, an order was issued by the Central Board of Excise and Customs under Section 37-B of the Central Excises and Salt Act, 1944 (as it stood then) clarifying that grey cotton canvas, cotton ducks, cotton tyre cord fabrics and cotton belting fabrics would thenceforth be classified under TH No. 52.05. According to the respondent: in view of this circular it did not press its appeal before this Court which was accordingly dismissed for non-procecution on 3rd November, 1995. This prompted the Central Board of Excise and Customs to examine the matter afresh issue an order on 30th June, 1997 in supersession of the 37B Circular dated 5-12-1993 that :- "A. grey cotton tyre cord fabrics, grey, belting cloth, grey filter cloth/straining cloth and grey belting cloth and belting ducks, generally having technical uses an....
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....ed in the Rules. Rule-I gives primacy to the Section and Chapter Notes along with terms of the headings. They should be first applied. If no clear picture emerges then only can one resort to the subsequent rules. The appellants have relied upon Rule 3. Rule 3 must be understood only in the context of sub-rule (b) of Rule 2 which says inter alia that the classification of goods consisting of more than one material or substance shall be according to the principles contained in Rule 3. Therefore when goods are prima facie, classifiable under two or more headings, classification shall be effected according to sub-rules (a), (b) and (c) of Rule 3 and in that order. The sub-rule 3 are quoted :- "(a) The heading which provides the most specific description shall be preferred to heading providing a more general description. However when two or more headings each refer to part only 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....