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2017 (2) TMI 1147 - AT - Central ExciseClassification of goods - carpet - classified under sub heading 5703.90 of the First Schedule to the Central Excise Tariff Act, 1985 or under sub heading 5703.20? - Held that - on going through the sub heading sub heading 5703.90 note 2(B) (ii) of Section XI of the Central Excise Act, 1985 wherein the textile products consisting of a ground fabric and a pile or looped surface no account shall be taken of the ground fabrics in the description of the goods or in the process of manufacture - the goods in question do not consist of a ground fabric and a pile or looped surface which is essential condition to specify the product in the sub heading note 2(B) of Section XI of the CEA, 1985. In the absence of such evidence sub heading note 2 (B) Section XI of the CEA, 1985 is not applicable to the facts of this case - appeal dismissed - decided against Revenue.
Issues: Classification of carpets under Central Excise Tariff Act, 1985 - Interpretation of sub heading note 2(B) (ii) of Section XI.
Analysis: The case involved a dispute regarding the classification of carpets manufactured by the respondents under the Central Excise Tariff Act, 1985. The respondents were initially clearing carpets under sub heading 5703.90 at a duty rate of 16% ad valorem. However, during a specific period, they cleared carpets and waste under sub heading 5703.20 at a nil rate of duty. The Revenue contended that the products should be classified under sub heading 5703.90 based on sub heading note 2(B) (ii) of Section XI of the Act. The Commissioner (Appeals) had ruled in favor of the respondents, classifying the goods under sub heading 5703.20. The Revenue appealed this decision before the Appellate Tribunal CESTAT CHANDIGARH. The Revenue argued that the decision of the Commissioner (Appeals) was not applicable to the present case and should be set aside. They contended that the carpets did not fall under the criteria specified in sub heading note 2(B) (ii) of Section XI, as there was no tacking of jute and polypropylene fibers together, unlike in a previous case. The Ld. Counsel for the respondent cited a previous Tribunal order in favor of the respondent to support their classification. Upon detailed examination, the Appellate Tribunal found that the goods in question did not meet the essential condition of consisting of a ground fabric and a pile or looped surface as required by sub heading note 2(B) (ii) of Section XI. Therefore, the Tribunal upheld the decision of the Commissioner (Appeals) and dismissed the appeal filed by the Revenue. The judgment highlighted that the absence of evidence supporting the application of the sub heading note to the facts of the case led to the dismissal of the appeal. In conclusion, the Appellate Tribunal's decision clarified the interpretation of the sub heading note 2(B) (ii) of Section XI in the context of textile products like carpets. The judgment emphasized the importance of meeting the specific criteria outlined in the tariff act for proper classification and duty determination.
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