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TMI Blog1995 (2) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... Multiple (folded) or cabled yarn or nylon or other polymides or of polyesters 55cN/tex Single multiple (folded) or cable yarn of viscose rayon. 27cN/tex 3.Tyre cord fabric is also regarded as a rubberised fabric, as is evident from Heading No. 59.05 in Chapter 59 Section XI. That heading reads thus : "Rubberised Textile fabrics, other than those of heading 59.02". 4.Note 3 in Chapter 59 defines "rubberised textile fabric" as - Textile fabrics impregnated, coated, covered or laminated(a) with rubber - weighing not more than 1,500 gm(i)2; or weighing more than 1,500 gm(ii)2 and containing more than 50 percent by weight of textile material; Fabrics made from yarn, strip or the like impregnated,(b) coated, covered or sheathed with rubber, of heading No. 56.04 : Fabrics composed of parellel textile yarns, agglomerated with(c) rubber irrespective of their weight per square metre; and Plates, sheets or strip of cellular rubber, combined with(d) textile fabric, where the textile fabric is more than mere reinforcement, other than quilted textile products. 5.Thus, the Act treats tyre cord fabric made of high tenacity yarn as a textile fabric which is rubberised and is suitable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the register `summary of tyre cord cases' maintained by the petitioner in its Central Testing Laboratory; that the tenacity of the yarn after processing of the fabric in some cases had fallen below the specifications laid down in Note 4 Sec. XI of the Act. The authorities by a show cause notice dated 17-12-1990 asked the petitioner to show cause as to why tyre cord fabric of other than high tenacity yarn should not be classified under Tariff Heading 5905.20 and why the differential duty of Rs. 36,48,983.01 should not be demanded from 1-1-1987 to 7-10-1990. By another notice dated 3-4-1991, petitioner was called upon to show cause when it should not be called upon to pay Rs. 99,573.90 for such goods cleared during the period 8-10-1990 to 20-3-1991. It is not in dispute that the demands so made are only in respect of processed tyre cord fabric made of yarn, whose tenacity, as found by the tests conducted by the petitioner after the processing, was less than that prescribed. 11.After considering the reply given by the petitioner, as also the materials produced before the authorities, the first respondent, Collector of Central Excise, by his order dated 2-4-1992 held that peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the scope of the Tariff headings goods which do not ex facie fall within the scope of the entry then notwithstanding the availability of the alternative remedy, this Court should decide the question on merits. It was further urged that the scope of the entry is a question of law which is more appropriately determined by this Court than by the appellate authority under the Act. 15.In support of this submission, Mr. Govind Swaminathan, relied on the following decisions. 16.In the case of A.V. Venkateswaran Collector of Customs Bombay v. Ramchand Sobhraj Wadhwani and Another - [1983 (13) E.L.T. 1327 (SC) = AIR 1961 SC 1506] a Constitution Bench of the Supreme Court held that : "The wide proposition that the existence of an alternative remedy is a bar to the entertainment of a petition under Art. 226 of the Constitution unless (1) there was complete lack of jurisdiction in the officer or authority to take the action impugned, or (2) where the order prejudicial to the Writ petitioner has been passed in violation of the principles of natural justice and could, therefore be treated, as void or non-est and that in all other cases, Courts should not entertain petitions under Art. 226, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion Bench of this Court in the case of English Electric Co. of India Ltd.v. Superintendent Central Excise and Others - [1979 (4) E.L.T. (J 36)] wherein this Court held that "The scope of an entry in the first schedule to the Central Excises and Salt Act, 1944 is always a question of law and whether it applies to a given article is also a mixed question of law and fact, and such a question, therefore, falls within the powers of the High Court under Art. 226 of the Constitution." 20.In the case of Assistant Collector of Central Excise, Customs House, Pondicherry and Another v. New Horizon Sugar Mills (P) Ltd., Pondicherry - [1980 (6) E.L.T. 10 (Mad.)] a Division Bench of this Court held that if the writ petition does not involve any investigation into controverted questions of fact but merely involves an interpretation of a statutory notification of the Government of India there is no bar for granting relief under Art. 226 of the Constitution. 21.In the case of Union of India and Others v. TSR & Co. - [1985 (22) E.L.T. 701 (Mad.)] another Division Bench of this Court held that if the classification of a product is found to be arbitrary and unreasonable so as to make it perverse, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to interfere with such determination under Article 226 of the Constitution. The Court also held that if there are two constructions which an entry can reasonable bear and one of them which was in favour of revenue was adopted. the Court has no jurisdiction to interfere merely because the other interpretation favourable to the subject appeals to the Court as the better one. 27.In the case of Madura Coats Ltd. v. Collector of Central Excise Madurai - [1994 (71) E.L.T. 347 (SC)], the Supreme Court directed the Tribunal to entertain an appeal by the appellant before the Court if such appeal is filed within a period of two weeks from the date of the Court's order and not to dismiss the same on the ground of limitation and to treat pendency of the proceedings in the High Court as well as in the Supreme Court, as sufficient cause for condoning the delay. 28.In the case of Collector of Customs, Madras v. Madras Electro Castings (P) Ltd. - [1994 (71) E.L.T. 646 (Mad.)] a Division Bench of this Court held that the Appellate Tribunal constituted under Customs, Excise and Gold (Control) Act is competent to pass interim orders, that power being inherent in the appellate power. The Court furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 226 is indeed extra-ordinary in all cases and more so in cases where alternate remedies are available; such jurisdiction can only be invoked in exceptional cases. This Court will not normally interfere if adequate alternate remedies are available. The mere fact that Rule has been issued does not create a right in the petitioner to have the matter adjudicated by this Court. The matter is entirely one of sound discretion of this court to be exercised with due regard to the facts of the case before the Court. 32.The main issue that arises in this petition is that concerning the scope of the Entry 59.02. As pointed out by the learned counsel for the petitioner, this entry does not refer to either processed or unprocessed tyre cord fabric but merely describes the goods as tyre cord fabric of high tenacity yarn. 33.The basic facts namely that the petitioner manufactures unprocessed tyre cord fabric of high tenacity yarn; that it also processes the same, though such processing is at the request of and to the specifications of its customers who are tyre manufacturers; that only some of the batches of the processed tyre cord fabric were found on testing to contain yarn whose tenacity at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Having regard to its industrial use after such fabric is impregnated, coated or laminated, tyre cord fabric has been included in Chapter 59. 40.The tyre cord fabric in order to be used for the manufacture of tyres must necessarily undergo the process of rubberising. Section 59.05 captioned "rubberised textile fabrics" other than those of 59.02 would indicate that the tyre cord fabric mentioned in 59.02 is also regarded as rubberised textile fabric and if such tyre cord fabric is made of yarn whose tenacity is less than that specified, such tyre cord fabric would fall within the scope of Heading 59.05. The fact that the word "textile" is not used in 59.02 is of no consequence as the heading of Section XI in textiles and textile articles and all the goods enumerated in various chapters in this Section are textile or textile articles. 41.That the tyre cord fabric is textile fabric cannot admit of any doubt also in the light of the decision of the Supreme Court in the case of Delhi Cloth & General Mills Co. Ltd. v. State of Rajasthan and Others - 1980 (6) E.L.T. 353 (SC) = [AIR 1980 (SC) 1552]. The Court therein examined in depth the question as to whether the tyre cord fabric can p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overed by 59.05, also it is apparent that the tyre cord fabric of high tenacity yarn referred to in 59.02 is rubberised or processed tyre cord fabric and not unprocessed tyre cord fabric of high tenacity yarn. The petitioner does not dispute the fact that the product is described as tyre cord fabric only even after rubberising is done, and that such processing does not result in a new product. 45.The rate of duty for the goods covered by the description in Tariff Heading 59.02 is lesser than the specified in 59.05, obviously with a view to encourage the use of tyre cord fabric of high tenacity yarn in the manufacture of tyres. 46.The exemption from basic duty granted for tyre cord fabric of high tenacity yarn has apparently been granted also with a view to encourage tyre manufacturers to use tyre cord fabric of high tenacity yarnthereby ensuring higher degree of safety for the user of the vehicles. This object is wholly defeated if the tenacity of the yarn in the fabric used in the tyre after availing the benefit of such exemption is less that specified in Section Note 4 to Section XI of the Act. 47.The fact that in the notification exempting tyre cord fabric of high tenacity ya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore to be upheld. 51.Learned counsel for the petitioner raised the question of limitation when the matter was argued though that plea has not been raised in the petition. As the question of limitation is a question of law, the petitioner was permitted to raise this plea. 52.The impugned orders cover the period from 1-7-1987 to 7-10-1990 and the demands admittedly raised after the period of six months. The respondents rely upon the proviso to Section 11A of the Central Excises and Salt Act, while the petitioner relies on Section 11A(1) of the said Act. It is not in dispute that the assessment for this period has not yet become final and still remains provisional. It is also not in dispute that the petitioner has opted for the self removal procedure under the relevant Rules. For the petitioner, it is submitted that the petitioner has filed a classification list and cleared the goods by availing of the benefit of the exemption notification and such clearance being within the knowledge of the respondents, the respondents are procluded from claiming the benefit of longer period of limitation provided under the proviso to Section 11A as there was no wilful default on the part of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant was guilty of any of those situations which are visualised by the Section, the burden shifts and then applicability of the proviso has to be construed liberally. 56.Learned counsel for the Revenue also referred to a Judgment of a learned single Judge of this Court in the case of Limenaph Chemicals v. Union of India - [1993 (68) E.L.T. 77 (Mad.)] wherein this Court held on the facts of that case that there was a deliberate misstatement of the product and the entitlement of the same to exemption under the notification of 1970; that once it is made out that there was a misstatement of facts, as regards the eligibility of the product for exemption, it follows that the proviso to Section 11A of the Act would apply. It was further held that the fact that the Department was aware of the manufacture by the petitioner and that samples have been taken by the Department on more than one occasions, would not alter the situation and that what is required for the proviso is a misstatement of fact on the part of the person concerned and not the knowledge of the Department about the manufacture of the particular product. 57.The proviso to Section 11A is attracted to the facts of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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