TaxTMI 
TaxTMI 
2005 (4) TMI 235
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the CEGAT, wherein CEGAT had followed the judgment of the Hon'ble Andhra Pradesh High Court. Hon'ble Supreme Court decided all the said matters together vide the judgment reported in 2004 (167) E.L.T. 372. These matters were also remanded back to the Tribunal for deciding the same afresh in accordance with law. Facts relating to Appeal No. 416/2000 are given below : 2.This appeal has been filed by the Department against the Order-in-Appeal dated 13th March, 2000, passed by the Commissioner of Customs & Central Excise (Appeals), Shillong. The Commissioner (Appeals) allowed the appeal filed by the Respondent's Company against the order dated 26-11-1999 passed by the Assistant Commissioner of Central Excise & Customs, Bhubaneswar. The period involved is December, 1991 to February, 1999. The process of manufacture of the carpets as disclosed by the Respondents at the factory of the Respondent Company is as under : The said carpets are manufactured by interlacement of three yarns which are simultaneously interlaid on the looms during the weaving process. For manufacture of the said carpets, the respondent buys or procures from its other units different types of yarn, such as,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s been filed by the Department. Facts relating to Appeal No. ER-14/2001 are given below : 4.Consequent to the Assistant Commissioner's Order dated 26-11-1999, the Superintendent of Central Excise issued two show cause notices dated 8-2-2000 and 23-2-2000 seeking to demand differential duty for the period from December 1992 to January 2000. The demand was confirmed by the Assistant Commissioner vide his Order dated 30th March, 2000. The respondent company filed an appeal before the Commissioner (Appeals). The Commissioner (Appeals) following the earlier order dated 13-3-2000, allowed the said appeal vide Order-in-Appeal dated 25th August, 2000. Against this order, the present Appeal No. ER-14/2001 has been filed by the Department. 5.We have heard Shri J.R. Madhiam, ld. JDR for the Appellant-Revenue and Shri S.K. Bagaria, ld. Sr. Advocate along with Shri Partha Banerjee, ld. Advocate for the respondents. 6.Shri Madhiam submits that instead of rectified Assistant Commissioner's order for revising classification list with effect from December 1991 till April 1994, the Commissioner (Appeals) committed an error by deciding afresh issue of classification during the aforesaid p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....riff. He submits that the said Chapter Note only defines the expression carpets and other textile floor coverings for the purposes of Chapter 57. The limited use of the said Chapter Note is to decide the issue as to whether the goods in question are carpets for the purposes of Chapter 57 or not. He submits that there is no dispute at all in the present case. According to the Department, the goods are classifiable as carpets falling under Chapter 57. He submits that whereas the goods are carpets falling under Chapter 57, the role of Chapter Note 1 comes to an end. The classification of such carpet has to be decided based on description of such heading/sub-heading read with the relevant Section Notes and Chapter Notes. For this purpose, the said Chapter Note 1 is not at all relevant. He submits that the carpets manufactured by the respondent company, the exposed surface was made of polypropylene yarn which was also a textile material falling under Chapter 55. Thus by applying Chapter Note 1 of Chapter 57, the goods in question were carpets and there was no dispute. He submits that in the carpets manufactured by the respondent company, jute admittedly predominates by weight over each ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n below : "…..For the purposes of this Chapter, the term 'carpets and other textile floor coverings' means floor coverings in which textile materials serve as the exposed surface of the article when in use and includes article having the characteristics of textile floor coverings but intended for use for other purposes." The carpets manufactured by the respondents-company, the exposed surface was made of polypropylene yarn which was a textile material falling under Chapter 55. Thus by applying test incorporated in Chapter Note 1 of Chapter 57, the goods in question were carpets and there was no dispute. As can be seen from this Note at the top of the Chapter 57, it defines only the term 'carpets and other textile floor coverings' and does not deal with the manner in which a carpet made out of different textiles are to be classified. This situation is dealt in Note 2(A) read with Section Note 14(A) of Section XI of the Central Excise Tariff. Section 2A and Section Note 14(A) of Section XI of Central Excise Tariff states as follows : "2 (A) Articles classifiable in Chapters 50 to 55 or in Heading No. 58.06 or 59.02 and of a mixture of two or more textile materials are to b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Excise Tariff. This position prevailed up to 1994-95. From 1995-96 onwards, the same position continued to prevail under Section Note 2(A) read with sub-heading Note 2(A) of Section XI of the Central Excise Tariff. As per the said statutory provisions, the said carpets containing two or more textile materials are to be regarded as consisting wholly of that textile material which predominates by weight over any other single textile material. In the present case, in the said carpets, jute predominates by weight over each other single textile material, the said carpets could only be classified as jute carpets. Therefore, it is clear from the criteria, where two textile materials are mixed to produce the goods in question, the textile material which predominates by weight over the other-textile material has to be taken as the proper classification of the goods. It is clear from the reasons mentioned above, the interpretation sought to be given by the Department to Chapter Note 1 of Chapter 57 is totally contrary to and inconsistent with the said Chapter Note itself and is wholly misconceived. The said carpets can only be classified as jute carpets and nothing else. As stated above, the....