2016 (3) TMI 224 - AT - Central Excise

Jute mattings manufactured - whether are floor coverings or not ? - Notification No. 29/95-CE dt 16/3/1995 benefit claimed - Held that - Both the Revenue as well as the Respondent has relied upon the same Dictionary description of the word mattings as neither the word matting nor Floor covering has been defined in Notification No. 29/95-CE. As per this dictionary meaning matting has been described as plaited or woven mats & similar articles made of coir fiber Jute Straw and the uses are for floor or wall covering & table mats. It is thus observed that as per this meaning the mattings can also be used & understood as floor coverings. The argument taken by the Revenue that floor coverings of jute should be exclusively used for floor covering is not supported by as such specific mention in the exemption notification. It has been correctly observed by the Adjudicating authority that jute mattings are neither specifically included in Sr. No. 1 nor excluded from Sr. No. 3 of the table annexed to Notification No. 29/95-CE dt 16/3/95. Revenue has also taken an argument that exemption to Jute Matting was available under earlier Notification No. 50/90-CE dt 20/3/90, therefore, Jute Mattings are different products. In this regard we observed that Notification No. 50/90-CE dt 20/3/90 does not say that Jute mattings are not floor coverings. Accordingly we hold that nothing bars the appellant to avail the benefit of Sr. No. 3 to Notification No. 29/95-CE for their product Jute Mattings when the products can also be capable for other uses. It is not the case of the Revenue that the goods manufactured by the Respondent can not be used at all as floor coverings. Accordingly we do not find any reason to interfere with the orders on merits passed by the Adjudicating authority in allowing the claim - Decided in favour of assessee Extended period of limitation - Held that - There was no willful suppression or misstatement on the part of the Respondent to evade payment of duty and accordingly we also hold that extended period can not be invoked in the present proceedings.- Decided in favour of assessee

Summary

Issues:
1. Classification of jute mattings as floor coverings for duty purposes.
2. Interpretation of Notification No. 29/95-CE regarding the duty rate for jute mattings.
3. Application of the extended period for demand in the case.

Issue 1: Classification of Jute Mattings:
The appeal centered around whether jute mattings manufactured by the Respondent qualified as floor coverings. The Revenue contended that the mattings could be used for purposes other than floor covering, thus not meeting the criteria for the 5% duty rate under Notification No. 29/95-CE. The Respondent argued that the matting classification as floor coverings was valid, citing dictionary definitions and legal precedents. The Adjudicating authority found that the mattings could be considered floor coverings based on the dictionary meaning of "matting." The Tribunal agreed, noting that the exemption notification did not specify exclusive use as floor coverings and upheld the Respondent's entitlement to the duty exemption.

Issue 2: Interpretation of Notification No. 29/95-CE:
Both parties referenced the dictionary definition of "matting" to support their arguments, as the notification did not define the terms "matting" or "floor covering." The Tribunal observed that the absence of an exclusive use requirement for jute floor coverings in the notification favored the Respondent's position. The Revenue's argument regarding a previous notification was dismissed as it did not explicitly exclude jute mattings from the category of floor coverings. The Tribunal concluded that the Respondent could claim the benefit of the 5% duty rate under Sr. No. 3 of Notification No. 29/95-CE for their jute mattings.

Issue 3: Application of Extended Period for Demand:
The Respondent contended that there was no willful suppression or misstatement in the classification list approved by the departmental officer, thus challenging the invocation of the extended period for demand. The Adjudicating authority concurred, finding no deliberate act to evade duty payment. The Tribunal upheld this finding, agreeing that the extended period could not be invoked due to the absence of willful misstatement by the Respondent. Consequently, the appeal filed by the Revenue was dismissed, affirming the order-in-original passed by the Adjudicating authority on 8/8/2007.

This comprehensive analysis of the legal judgment highlights the key issues, arguments presented by both parties, the Tribunal's reasoning, and the final decision rendered in the case.