1984 (11) TMI 318 - HC - Central Excise

Summary

Issues Involved:
1. Classification of yarn under the Central Excise Tariff.
2. Jurisdiction and authority of the Assistant Collector, Central Excise.
3. Interpretation of Tariff Item 18(III) and relevant sub-items.
4. Validity of the provisional assessment and subsequent order.
5. Availability and appropriateness of alternative remedies.

Issue-wise Detailed Analysis:

1. Classification of Yarn under the Central Excise Tariff:
The petitioner, M/s. Hind Syntex Ltd., engaged in the manufacture of blended yarn, claimed that their product should be classified under Tariff Item 18(III)(i) as it predominantly contains cellulosic fibre. They argued that the yarn manufactured from non-cellulosic waste blended with cellulosic fibre should not fall under Tariff Item 18(III)(ii). The respondents contended that the so-called non-cellulosic polyester waste is essentially polyester fibre, thus making the yarn dutiable under Tariff Item 18(III)(ii).

2. Jurisdiction and Authority of the Assistant Collector, Central Excise:
The petitioners submitted their classification list to the Assistant Collector, Central Excise, Ujjain, who ordered that the product falls under Tariff Item 18(III)(ii). The petitioners challenged this order under Article 226 of the Constitution of India, claiming it was illegal and without jurisdiction. The court noted that the Assistant Collector had the jurisdiction to make the classification and that the petitioners should have appealed against the order rather than filing a writ petition.

3. Interpretation of Tariff Item 18(III) and Relevant Sub-items:
The court examined the interpretation of Tariff Item 18(III), which deals with cellulosic spun yarn. Sub-item (i) covers yarn not containing man-made fibres of non-cellulosic origin, while sub-item (ii) covers yarn containing man-made fibres of non-cellulosic origin. The court emphasized that the classification depends on the fibre content of the yarn and not the initial raw material used. The court also referred to the explanation attached to Tariff Item 18(III), which states that the predominance in weight should be judged based on the fibre content.

4. Validity of the Provisional Assessment and Subsequent Order:
The Assistant Collector's letter dated 7-2-1984 (Annexure-8) provisionally classified the yarn under Tariff Item 18(III)(ii) and allowed the petitioners to clear the goods at the specified duty rates. The court noted that the petitioners had the opportunity to present their case and request an appealable order, which they did not pursue. The court found that the provisional assessment and subsequent order were valid and that the petitioners should have appealed against the order instead of seeking a writ.

5. Availability and Appropriateness of Alternative Remedies:
The court emphasized that the petitioners had an alternative remedy of filing an appeal with the Collector (Appeals) Central Excise, New Delhi. The court held that the writ jurisdiction should not be exercised when an adequate alternative remedy is available. The court also noted that the petitioners rushed to file the writ petition without availing the alternative remedy.

Conclusion:
The court dismissed the writ petition, stating that the petitioners should have pursued the alternative remedy of filing an appeal. The court found that the Assistant Collector had jurisdiction to classify the yarn under Tariff Item 18(III)(ii) and that the provisional assessment and subsequent order were valid. The court also held that the interpretation of the tariff item should be based on the fibre content of the yarn and not the initial raw material used. The petition was dismissed with no order as to costs, and the security amount was ordered to be returned to the petitioners.