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TMI Blog2025 (2) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... clubbed in such material are excluded from Chapter 56 and Second Note (h) of Section XI of the First Schedule to the Central Excise Tariff Act, which also states that this section does not cover "Non-wovens, whether or not impregnated, coated, covered or laminated" with plastics or articles thereof of Chapter 39. The adjudicating authority noted that the said allegation was raised only on the basis that the impugned product is manufactured completely from 100% polypropylene. The adjudicating authority also took note of the definition of the term "Non-woven" as defined in the handbook on glossary on textile terms issued by the Bureau of Indian Standards under SP: 45-1988 and after taking note of the said definition, the adjudicating authority held that the product is Non-woven since it is composed of polypropylene fibres and merits classification under Chapter heading no.5603 of the Central Excise Tariff Act, 1985. The revenue never disputed the classification of PPSB Bed Sheets, manufactured by the appellant under HSN 6304 - Unfortunately, in the case on hand, the revenue appears to have shifted the burden on the petitioner to prove the negative which is not sustainable in law - w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d due to inverted tax structure for two different periods which are not in dispute. The adjudicating authority has noted the manufacturing process adopted by the assessee and held that the classification of Non-Woven Fabric and PPSB Bed Sheets as manufactured from the said Non-Woven Fabric is not correct and it shall file under HSN in Chapter 39. 6. With this reasoning the application filed for refund arising due to inverted duty structure was rejected. 7. Aggrieved by such order the assessee preferred an appeal under Section 107(1) of the Act before the Joint Commissioner, West Bengal State Tax. 8. The first issue which was considered by the Appellate Authority is whether Non- Woven Fabric which made from filament and how the said manmade filament are made from polypropylene granules. We need not examine this issue in appeal as the Appellate Authority agreed with the assessee's submissions and finding was rendered in favour of the assessee holding that non-wovens, whether or not impregnated, coated, covered or laminated of manmade filament, is rightly classifiable in Chapter 56 under HSN and 75603 and GST should be charged at 12% instead of 18%. 9. This finding has attained fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion dispute, that too, in a writ petition since the assessee does not have effective alternate remedy since the Tribunal has not been constituted. Therefore, the writ petition was allowed to be maintainable and the order dismissing the writ petition was set aside and the writ petition was restored to the file of the learned Writ Court to be decided on merits and in accordance with law. Pursuant to such order and direction, the writ petition has been heard and as observed earlier, all findings on fact and law are wholly in favour of the appellant/assessee except that portion of the order by which the matter stood remanded for de novo consideration by the appellate authority. After recording the said submissions made on either side and taking note of the various decisions cited at the bar, the learned Single Bench held that the appellate authority inadequately considered various factual elements in the decision making process and that the onus of proving a product's classification under a specific tariff heading lies with the revenue, which was demonstrated that such classification allowance with the understanding of consumers or common parlance. In this regard, learned Single Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been mentioned : "1. Sub-Chapter 1 applies only to made up articles, of any textile fabric. 2. Sub-Chapter 1 does not cover : (a) goods of Chapters 56 to 62; or (b) worn clothing or other worn articles of heading 6309." 12. In terms of paragraph 1 of the notes, sub-Chapter 1 applies to only a `made up' articles to any textile fabrics. In terms of paragraph 2 of the notes, sub-Chapter 1 does not cover two categories which are mentioned in clauses (a) and (b) of which clause (a) would be relevant for the case on hand, which reads as "goods of Chapter 56 to 62; or". Thus, it is seen that the appellate authority has misread the second note in Chapter 63 and has used the word "that articles made of Chapter 56 to 62". By wrong substitution of the word "that" which is not contained in the chapter note, the appellate authority has arrived at a finding that the bed sheets in question have to be taxed at 12%. The authority failed to note that the word "made is not found in subpara 2 of the notes under Chapter 63". It is settled legal principle that the authorities nor the court can add words or substitute words in a statute and it has to be read as such and the plain meaning s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eding initiated by the Central Excise Authorities on the ground that the classification of the final product by the appellant was incorrect and the availment benefit of exemption notification was wrong. Show-cause notices were adjudicated and an order-in-original dated 22nd December, 2015 was passed by the Commissioner of Central Excise, Kolkata-II holding that the goods manufactured by the appellant are classifiable under Chapter 39 of the Central Excise Tariff Act and confirmed the entire demand along with appropriate interest and mandatory penalty equal to the amount confirmed as proposed in the show-cause notice. This order of adjudication was challenged by the petitioner by filing a writ petition before this Court in WP 378 of 2016 and by order dated 4th May, 2016 the order-in-original was set aside subject to the condition that the appellant makes a pre-deposit of Rs.5 Lacs to the concerned Commissioner within a timeframe and thereafter the Commissioner to afford an opportunity of hearing to the appellant. The order also further stated that in the event the Commissioner passes a different order and accepts the appellant's claim for the product to be regarded under Chapter 56 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticles thereof of Chapter 39. The adjudicating authority noted that the said allegation was raised only on the basis that the impugned product is manufactured completely from 100% polypropylene. The adjudicating authority also took note of the definition of the term "Non-woven" as defined in the handbook on glossary on textile terms issued by the Bureau of Indian Standards under SP: 45-1988 and after taking note of the said definition, the adjudicating authority held that the product is Non-woven since it is composed of polypropylene fibres and merits classification under Chapter heading no.5603 of the Central Excise Tariff Act, 1985. The adjudicating authority took note of Rule 3(a) of the General Rule for interpretation of the First Schedule of the Central Excise Tariff Act, which states that heading providing most specific description is preferred to the headings of more general description and since non-wovens are specifically covered under Chapter 56, the goods should fall under Chapter 56 of the Central Excise Tariff Act. Further, it was noted that Chapter heading 5603 contained sub-heading which specifically covers non-woven fabric which made from filaments. Apart from that, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to resurrect a settled issue which is impermissible under the law. 20. Thus, taking note of the above as held by the Hon'ble Supreme Court in Hari Bishnu Vs. Syed Ahmed Ishaque And Ors. ; (1954) 2 SCC 881, a writ of Certiorari could be issued to correct an error of law; it is essential that it should be something more than a mere error; it must be one which must be manifest on the face of record. It was also held that what is an error apparent on the face of the record cannot be defined precisely and exhaustively and there being an element of indefiniteness inherent in its very nature, it must be left to be determined judicially on the facts of each case. 21. In Apparel Export Promotion Council Vs. A.K. Chopra; (1999) 1 Supreme Court Cases 759 the Hon'ble Supreme Court while explaining the concept of judicial review held that the court must remained conscious of the fact that if the decision has been arrived at by the administrative authority after following the principles established by law and the rules of natural justice and the individual has received a fair treatment to meet the case against him, the Court cannot substitute its judgement for that of the administrative autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Private Hospitals were also placed before the authority. 24. That apart the revenue never disputed the classification of PPSB Bed Sheets, manufactured by the appellant under HSN 6304. In Collector of Central Excise, Meerut Vs. Kapri International Pvt. Ltd. reported at 2002 (142) ELT 10 (SC) the Hon'ble Supreme Court held that cutting the cotton fabrics from running length into small pieces brings into existence new commodities like bed-sheets, bed spreads, table cloths etc. which had a definite commercial identity in the market. That apart the cardinal rule is that the burden of proof is on the revenue when they raised dispute regarding the classification of a product. For this proposition reference is made to the decision of the Hon'ble Supreme Court in Union of India Vs. Garware Nylons Ltd., 1996 (87) ELT 12(SC). Unfortunately, in the case on hand, the revenue appears to have shifted the burden on the petitioner to prove the negative which is not sustainable in law. 25. Thus for all the above reasons, we are of the clear view that when the learned Single Bench found the legal position is wholly in favour of the appellant, the necessity to remand the matter for fresh consider ..... X X X X Extracts X X X X X X X X Extracts X X X X
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