2016 (12) TMI 214 - AT - Central Excise

Classification of manufactured 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 at nil rate of duty? - Held that - We have gone 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. We find that the goods in question consisting 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 Central Excise Act, 1985. In the absence of such evidence sub heading note 2 (B) Section XI of the Central Excise Act, 1985 is not applicable to the facts of this case. Therefore, we do not find any infirmity in the impugned order, the same is upheld and the appeal filed by the Revenue is dismissed.

Summary

Issues:
Classification of carpets under the Central Excise Tariff Act, 1985

Analysis:
The case involved a dispute regarding the classification of carpets manufactured by the respondents under the Central Excise Tariff Act, 1985. The respondents had been clearing carpets and their waste under a nil rate of duty, while the Revenue contended that the products should be classified under a different subheading attracting duty. The Commissioner (Appeals) initially ruled in favor of the respondents, classifying the goods under a specific subheading. The Revenue appealed this decision, arguing that the Commissioner (Appeals) had misinterpreted the relevant subheading note.

During the proceedings, the Revenue pointed out that the Commissioner (Appeals) had relied on a previous Tribunal decision in a different case, which the Revenue claimed was not directly applicable to the present case. The Revenue emphasized that the specific subheading note in question did not align with the facts of the current case, as it pertained to textile products with specific characteristics not present in the respondents' carpets. The Revenue sought to set aside the Commissioner (Appeals) order based on this argument.

Upon review, the Tribunal examined the subheading note in question, which stated that for textile products with a ground fabric and a pile or looped surface, the ground fabric should not be considered. The Tribunal found that the goods in question did not meet the essential conditions specified in the subheading note, as there was no evidence of a ground fabric and a pile or looped surface as required. Therefore, the Tribunal upheld the initial decision of the Commissioner (Appeals), dismissing the Revenue's appeal. The judgment emphasized the importance of meeting the specific criteria outlined in the relevant subheading notes for accurate classification under the Central Excise Tariff Act, 1985.