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TMI Blog2017 (6) TMI 305X X X X Extracts X X X X X X X X Extracts X X X X ..... actured out of raw material covered by Central Excise Heading 54.04? - Held that: - The Tribunal has considered the rival contentions and relied upon several decisions including the opinion of an expert tendered by the original appellant and the Tribunal has opined that it is not possible to accept the contentions of the Commissioner of Sales Tax that the impugned product is not obtained by either of the two processes referred to therein and that therefore cannot be considered as material described in heading 54.05 and, therefore, not covered by Central Excise Tariff Head 54.04. Whether the Tribunal was justified in holding that the Commissioner has rejected the prayer and has adjudicated upon that prayer in exercise of the appellate powers, under Section 55 of the Bombay Act? - Held that: - once the orders are appealable by exercise of power under Section 55(6), the Tribunal has to pass the order as it deems just and proper. When despite making specific prayer, the said relief was not granted i.e. indirectly refused without giving reasons, it becomes the subject matter of Appeal, if such inaction on the part of Commissioner to consider the said relief has been challenged in App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bay Sales Tax Act, 1959, and if taxable, the rate of tax thereof ? (d) It was the contention of the opponent that these products being man made fabric are covered by Schedule Entry No.A15 appended to the Bombay Act. It was also contended that the opponents were manufacturer of HDPE yarn, HDPE cloth and filament products. The HDPE cloth is manufactured out of DHPE yarn and is man made fabric. It is subject to additional duties of Excise Act and is free from excise duty with effect from 25th July, 1996. The opponent tendered a letter in support of said submissions regarding the aforesaid product during the course of hearing before the determining authority. In the said letter it was stated that the process of manufacturing HDPE cloth out of HDPE filament is identical to that of textile cloth manufacturing as done on power looms. It was further stated that the opponent gets beams with various width 42, 48 etc., with mash of the filament yarn also fixed in length of 80 meter etc. The opponent then by a similar system of Weft Shuttles as used on power looms, manufacture HDPE cloth. It was further pointed out that the product was produced out of Synthetic Staple Fiber and it wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ober, 1996 to 30th April, 1998? (ii) Whether on the facts and the circumstances of the case, was the Tribunal justified in holding that the impugned product is covered by Central Excise Head 54.06 being manufactured out of raw material covered by Central Excise Heading 54.04? (iii) Whether on the facts and the circumstances of the case, was the Tribunal justified in granting a prospective effect to determination from 1st October, 1996 to 30th April, 1998? (iv) Whether on the facts and the circumstances of the case, was the Tribunal justified in adjudicating over the classification of the impugned product for the period not related to the transactions impugned in the determination order? 4. In support of the Reference, the opponent made the following submissions before the Tribunal : (a) The product impugned in the determination and described is known as filter fabrics. The predominant use of the product is in filtering water to separate it from suspended particles. The use can be said to be distinct from the use that in common parlance is attached to fabrics. Hence, in that view of the matter the use may be said to be specialized, technical. (b) When a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons is not available in any judgments of the Apex Court. 5 The advocate for the opponent made the following submissions before the Tribunal: (i) The assessee has proved beyond doubt that the product falls in Entry 54.06. Once it is confirmed that the product falls under Entry 54.06 of the Central Excise Tariff, there is no further debate possible. No reference lies as no question of law arises. (ii) In the Reference Application, new arguments were advanced by the revenue. The arguments advanced in the reference application are uncalled for and beyond the jurisdiction of the application of Section 61 of the Bombay Act. The questions posed by the revenue were never before the Tribunal. (iii) The assessee has proved beyond doubt that the goods fall under Excise Entry 54.06. The classification under the Bombay Act is based on the Central Excise Tariff and, therefore, the reliance on CET by the Tribunal to give prospective effect can be justified. It is a case of referential legislation. (iv) It was further contended that the Tribunal sitting in Appeal is in continuation of the determination proceeding. It is a power vested in the Commissioner of Sales Tax. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st October, 1996 and after 1st October, 1996 (i.e. for the transactions other than the specified transaction). Hence, the Tribunal's competence cannot be a question in the present reference. 8. The Tribunal further observed in the Reference that as far as the question of prospective effect is concerned, it was submitted on behalf of the revenue that the Appeal was against the order passed under Section 52(1)(e) of the Bombay Act. The appellate authority is not seized with the order under Section 52(2) of the said Act. If the original authority has not passed any order under particular sub section, the Appeal cannot be said to be available against the non order. The assessee has made the application for prospective effect but no order was passed on the said application. It was observed that Section 52(2) indicates that it is a prerogative of the Commissioner of Sales Tax to grant prospective effect, however, it may be noted that Appeal does not lie against any order passed by the Commissioner under Section 52. Section 56 specifies the non appealable order it has neither included the determination order passed under Section 52(1) nor the discretionary order passed by the Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for determination order was filed and, therefore, the ratio of the decision in the case of M/s. Ashish Enterprises is not applicable. 11 The Tribunal considered the following facts while determining the issue of grant of prospective effect: (i) On 1st May, 1998, retrospective effect was given to entry C I 17 with effect from 1st October, 1996. (ii) Appellant has made application for determination on 21st January, 1997. (iii) The Commissioner of Sales Tax has decided the issue on 5th June, 1996 i.e. after one and half years and the Appellant has not collected any taxes during this period. 12 It is further observed that the Tribunal found that the Appellant was guided by the determination order of Commissioner of Sales Tax in the case of (1) M/s. Sanghavi Industries wherein the High Density Polyethylene Mono Filament Woven Cloth as falling under entry 41 of Schedule A; (2) M/s. Bajaj Plastics Limited wherein HDPE Woven Fabrics were held as covered by entry 41 of Schedule A under the unamended Act. In the circumstances, the Tribunal while exercising its discretion judiciously granted prospective effect for the limited period of 1st October, 1996 to 30th Octob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with regard to any question of law arising out of such order. The law is very clear on the aspect of reference and the approach of the High Court while answering the Reference made by the Tribunal. In a reference, the High Court not being a Court of Appeal would not embark upon a reappraisal of evidence and arrive at finding of fact contrary to that of the Appellate Court. The High Court is not sitting in Appeal but it is deciding a Reference and, therefore, the question of reappraisal of the evidence does not arise. In the present case, the opponent approached the determining authority by preferring an application under Section 52 of the Bombay Act. The issue which was considered by the determining authority was whether the sales of 48 width 72 mesh woven cloth and sales of 48 mesh woven cloth, as indicated under sale bills are taxable under any entry under the Bombay Sales Tax Act, 1959 and, if taxable, the rate of tax thereof. The determining authority had opined that the products are covered by Schedule entry C I 17 and accordingly liable to tax at 4 %. The Tribunal vide its order dated 30th April, 2003 allowed the Appeal preferred by the opponent by setting aside the order p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal has observed that the question since arose whether the product HDPE woven cloth which is used as filter fabric can be said to be an impregnated, coated, covered or laminated textile fabrics or textile articles of a kind suitable for industrial use or technical usage. The inspection of the sample makes it clear that it is not an impregnated, coated, covered or laminated textile fabric. It is a settled position that the burden is on the department to prove that the product falling under particular sub heading is not covered by A.D.E. Act and, therefore, fails to qualify as one covered by Schedule Entry A 15 as fabrics described in A.D.E. Act. It is further observed that HDPE woven cloth, known as Filter Fabrics cannot be said to be a textile article of a kind suitable for industrial use or technical usage as it is understood in trade or industry. The word Industrial is defined in Chambers Dictionary as relating to or consisting in industry and the word Industry has been defined as the quality of being diligent, assiduity, steady application . The word Technical is defined as pertaining to art or applied science, industrial, department of knowledge or skill . There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nderstand as to how the Tribunal has referred to the said issue as a question of law when in the reference order itself, the Tribunal has assigned cogent reasons in affirmative holding that the Tribunal was justified in dealing with the said issue since it was raised before the determination authority as well as the appellate authority. In the reference order, it is observed that in the present case, the Commissioner has not exercised its discretion in favour of the dealer for granting the prospective effect, but, the opponent has sought said relief and moved the Commissioner for determination of the rate of the impugned product and despite making specific prayer, no relief is granted and no order is passed, which would mean that the Commissioner of Sales Tax has refused to grant the said relief. It was further observed that once the orders are appealable by exercise of power under Section 55(6), the Tribunal has to pass the order as it deems just and proper. When despite making specific prayer, the said relief was not granted i.e. indirectly refused without giving reasons, it becomes the subject matter of Appeal, if such inaction on the part of Commissioner to consider the said re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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