Custom, Excise & Service Tax Tribunal
) Madura Coats Ltd vs ) Cce Madurai on 26 February, 2008
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal Nos.E/8 to 10/2004 (by assessee)
E/31 to 33/2004 (by dept.)
[Arising out of Order-in-Appeal No.355 to 357/2003 dated 30.9.2003 passed by the Commissioner of Central Excise (Appeals), Madurai]
For approval and signature:
Honble Mr. P.G.CHACKO, Member (Judicial)
Honble Mr. P.KARTHIKEYAN, Member (Technical)
1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? :
2. Whether it should be released under Rule 27 of the
CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? :
3. Whether the Members wish to see the fair copy of
the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
1) Madura Coats Ltd.
2) CCE Madurai
Appellant/s
Versus
1) CCE Madurai
2) Madura Coats Ltd.
Respondent/s
Appearance :
Shri S.S.Thakur, Auth.Rep. Smt.Bhagya Devi, SDR For the Assessee For the Revenue CORAM:
Mr. P.G. Chacko, Member (Judicial) Mr. P. Karthikeyan, Member (Technical) Date of hearing : 26.2.2008 Date of decision : 26.2.2008 Final Order No.____________ Per P.G.CHACKO M/s.Madura Coats Ltd. (hereinafter referred to as the assessee) are engaged in the manufacture of all variety of textile fabrics including Grey Cotton/Synthetic Fabrics called Filter Fabrics or Leno Fabrics. The Grey Cotton (Leno/Filter) Fabrics were classified under Chapter 52 of the First Schedule to the Central Excise Tariff Act and the same were cleared without payment of duty under the erstwhile Rule 59A of the Central Excise Rules, 1944 till June 2001. During this period, the duty on yarn contained in the said fabrics was paid with interest. After June 2001, due to withdrawal of Rule 59A ibid, the assessee started paying duty on the yarn at the time of its captive consumption and the fabrics, classified under SH 5207.10 attracting Nil rate of duty, were removed without payment of duty. The Grey Synthetic (Leno/Filter) Fabrics, classified under chapter 54 or 55 depending on the nature of the synthetic material, were cleared on payment of Basic Excise Duty @ 8% and Additional Duty of Excise (GSI) @ 8%. From March 2002 onwards, the assessee paid duty on their Leno/Filter Fabrics under Chapters 52, 54 & 55 @ 8% (BED) + 4% [AED (GSI)]. The department issued show-cause notices from time to time demanding differential duty on the clearances effected from April99 onwards, by classifying the above products under Heading 59.09/59.11 of the Tariff Schedule. The demand was contested on the strength of the Tribunals Final Order No.699/98-D dt. 1.7.98 reported as Madura Coats Ltd. Vs CCE Madras, 1999 (106) ELT 213 (Tribunal) as also the Tribunals Larger Bench decision in Jyoti Overseas Ltd. Vs CCE Indore, 2001 (130) ELT 446 (Tri.-LB). The original authority, however, confirmed the demand of duty against the assessee by classifying the Leno/Filter Fabrics under the above heading on the basis of CBECs circular dt. 17.4.1997. Against the orders of the adjudicating authority, the assessee preferred appeals to the Commissioner (Appeals), wherein they pointed out, inter alia, that the Tribunals decision in Simplex Mills Co. Vs CCE Nagpur, 1993 (49) ECR 147 (Tribunal) which formed the basis of the above circular of CBEC had been overruled by the Larger Bench in Jyoti Overseas case (supra). The appellate authority, however, upheld the decision of the lower authority. The assessees appeals before us are directed against such orders of the appellate Commissioner.
2. In the aforesaid orders of the Commissioner (Appeals), appropriation was ordered of the AED (GSI) paid by the assessee in respect of Cotton (Leno/Filter) Fabrics classified under Heading 59.09 (later 59.11), towards the demand of BED confirmed against them. The Revenues appeals before us are against this adjustment (appropriation). It is the case of the Revenue that, as the assessee had not followed the provisional assessment procedure, any such adjustment of duty was not permissible. It is further submitted that any adjustment of AED (GSI) towards BED will be illegal.
3. The authorized representative of the assessee has submitted that the classification issue is no longer res integra inasmuch as it was settled by this Tribunal in the assessees own earlier cases. It is submitted that the lower authorities chose to classify the Leno/Filter Fabrics under Heading 59.11 (erstwhile Heading 59.09) by assuming that the fabrics were meant for industrial purposes only. It is pointed out that, in the assessees own case reported in 1999 (106) ELT 213, it was held by this Tribunal that, merely because the fabric manufactured by them was used in Tea industry without any further processing, it could not be said that it was an industrial fabric. In that case, the Tribunal confirmed the classification of Cotton Leno Fabric under Heading 52.05 and ruled out its classification as Industrial Fabric under 59.05. It is submitted that the Tribunals decision in Simplex Mills case (1993 (49) ECR 147 = 2004 (176) ELT 587) classifying Grey Cotton Fabrics meant for industrial purpose, under Heading 59.09 was overruled by the Larger Bench in Jyoti Overseas case, wherein Grey Cotton Fabric in running length not subjected to further processing by the manufacturer and used by buyers for making tarpaulin, tents etc. were classified under Heading 52.07. It is further pointed out that the Larger Bench decision in Jyoti Overseas was approved by the Supreme Court in the case of CCE Nagpur Vs Simplex Mills Co.Ltd., 2005 (181) ELT 345 (SC). The assessees representative has further pointed out that the CBECs circular dt. 17.4.1997, which formed the basis of the Tribunals decision in Simplex Mills case (supra) and was relied on by the lower authorities in the present case has been quashed by the Madras High Court in Coats Viyella India Ltd. Vs CBEC New Delhi, 2006 (204) ELT 213 (Mad.). We have heard ld.SDR also.
4. After considering the case law cited by the assessees representative, we find that the classification dispute has already been settled in the assessees own earlier cases. The classification of the Leno/Filter Fabrics under Heading 59.11 stands ruled out. Cotton Leno/Filter Fabrics have been classified under Chapter 52 of the Tariff Schedule irrespective of the purpose for which the buyer might use the goods. Hence the demand of duty raised on the assessee in terms of Heading 59.11 (erstwhile Heading 59.09) cannot be sustained. Consequently, there is no question of appropriation of AED (GSI) towards demand of BED.
5. In the result, the assessees appeals are allowed and the Revenues appeals are dismissed.
(Operative part of the order was
pronounced in open court on 26.2.2008)
(P.KARTHIKEYAN) (P.G.CHACKO)
MEMBER (T) MEMBER (J)
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