1987 (11) TMI 189 - AT - Central Excise

Summary

Issues:
Classification of laminated jute bags under Central Excise Tariff (CET) - Item 22A CET or Item 68 CET.

Analysis:
The case involved a dispute regarding the classification of laminated jute bags under the Central Excise Tariff (CET) - whether they fell under Item 22A CET or Item 68 CET. The Assistant Collector of Central Excise issued a notice to the appellants, alleging that they had been manufacturing and removing laminated jute bags without the necessary license and without paying central excise duty under Item 68 CET. The appellants contended that the goods should be classified under Item 22A CET and not under Item 68 CET. The Assistant Collector rejected their defense, holding them liable to pay duty under Item 68 CET. The appeal against this decision was dismissed by the Appellate Collector, leading to the current appeal.

The appellants argued that previous decisions by the Tribunal and the Calcutta High Court, which held that laminated jute bags fell under Item 68 CET, were incorrect. They cited several decisions, including Shriram Jute Mills Ltd., Birla Jute Manufacturing Co. Ltd., and Innes Watson & Co. (P) Ltd., which followed the Calcutta High Court's judgment. The Calcutta High Court had ruled that laminated jute bags were new goods distinct from jute fabric and that they did not fall under Item 22A CET.

The Tribunal, in its previous decisions, relied on the judgments of the Calcutta High Court in the absence of contradictory judgments from any other High Court. The Tribunal noted that post-1-3-1975, the goods would fall under Item 68 CET as goods not specified elsewhere in the CET. The appellants contended that these decisions did not consider the amendments made to Entry 22A in 1972 and 1977.

In 1972 and 1977, Entry Item No. 22A was amended to specify the types of jute manufactures covered under the entry. The amendments excluded certain types of jute manufactures and clarified that jute manufactures where jute predominates in weight would fall under Item 22A. The appellants argued that the earlier judgments failed to consider these amendments and that laminated jute bags should be classified under Item 22A CET.

The Tribunal, however, rejected the appellants' arguments and upheld the order of the Appellate Collector, stating that the earlier decisions were correct in classifying laminated jute bags under Item 68 CET. The appeal was dismissed based on the precedent set by previous decisions and the interpretation of the relevant tariff entries.