1989 (9) TMI 120 - HC - Central Excise

Summary

Issues Involved:
1. Classification of HDPE woven sacks under the Central Excise Tariff Act, 1985.
2. Availability of alternative remedy and jurisdiction of the High Court to entertain the writ petition.
3. Applicability of previous judgments and circulars in the context of the new Tariff Act, 1985.

Summary:

1. Classification of HDPE woven sacks under the Central Excise Tariff Act, 1985:
The petitioners, limited companies manufacturing HDPE woven sacks, contended that their products should be classified under Chapter 39 of the Central Excise Tariff Act, 1985, as articles of plastic. The Assistant Collector, Central Excise, classified the HDPE strips under sub-heading 5406.11 and Polypropylene under sub-heading 5406.90, with fabrics thereof under heading 5408.00, thus requiring duty payment under Chapter 63.01 at 12% ad valorem. The petitioners argued that HDPE tapes fall under Heading 39.20, HDPE fabrics under Heading 39.26, and HDPE sacks under Heading 39.23 sub-heading 3923.90. They cited differences between HDPE and textile materials, supported by various reports and expert opinions, and argued that in common parlance, HDPE woven sacks are known as plastic sacks. The court held that HDPE strips or tapes fall under Heading 39.20, sub-heading 3920.32, and HDPE sacks under Heading 39.23, sub-heading 3923.90, thus quashing the orders of the Assistant Collector and Collector (CE) Appeals.

2. Availability of alternative remedy and jurisdiction of the High Court to entertain the writ petition:
The respondents argued that the petitioners should have exhausted alternative remedies available under the Central Excise Law, specifically by appealing to the Central Excise Gold Appellate Tribunal. The petitioners countered that the impugned order was manifestly illegal and based on an incorrect interpretation of the tariff entry, making it challengeable directly before the High Court. The court, referencing the Supreme Court judgment in A.V. Venkateswaran, held that the availability of an alternative remedy does not bar the High Court from exercising its jurisdiction under Art. 226/227 of the Constitution, especially when the order is manifestly illegal.

3. Applicability of previous judgments and circulars in the context of the new Tariff Act, 1985:
The petitioners cited previous judgments of the Central Excise Gold Appellate Tribunal, which classified HDPE woven sacks as articles of plastic, a finding upheld by the Supreme Court. They argued that these judgments should be binding despite the introduction of the new Tariff Act, 1985. The respondents contended that the new Tariff Act, based on the harmonized system of nomenclature, necessitated a different classification. The court found that the judgments and circulars issued under the old tariff were still relevant and that the HDPE woven sacks should be classified as articles of plastic under the new tariff as well.

Conclusion:
The court allowed the petition, quashing the orders of the Assistant Collector and Collector (CE) Appeals, and directed the respondents to classify the HDPE woven sacks under Chapter 39 of the Central Excise Tariff Act, 1985. No other points pertaining to other issues were raised during the course of the arguments. There was no order as to costs.