1987 (7) TMI 108 - HC - Central Excise

Summary

Issues:
1. Classification of laminated gunny bags under Item No. 68 or Item No. 22A of the Central Excise and Salt Act.
2. Applicability of excise duty and limitation period under Section 11A of the Act.

Analysis:

Issue 1: Classification of laminated gunny bags
The petitioner, an International packing Industry, manufactured laminated gunny bags and disputed the classification under Item No. 68 or Item No. 22A of the Act. The Court analyzed the definitions of both items and held that laminated gunny bags could fall under Item No. 22A. The Court emphasized that the key criterion was whether jute predominates in weight in the manufactured goods. It was concluded that even if the goods had a separate identity from raw jute due to the manufacturing process, as long as jute predominates in weight and the goods are not elsewhere specified, they fall under Item No. 22A.

Issue 2: Applicability of excise duty and limitation period
The Court examined the exemption notification exempting laminated jute bags under Item No. 68 from excise duty. However, the Court clarified that this description in the notification did not alter the classification under Item No. 22A. Since the goods were held to fall under Item No. 22A, the duty payable had already been paid by the jute manufacturer, and no further excise duty was permissible under Item No. 68. Consequently, the Court did not delve into the limitation issue under Section 11A of the Act.

In conclusion, the Writ Petition was allowed, quashing the order detrimental to the petitioner. The Court ruled in favor of the petitioner's classification argument under Item No. 22A and did not address the limitation issue due to the classification outcome. No costs were awarded in the judgment.