http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 1  

CASE NO.: Appeal (civil)  7524-7525 of 2004

PETITIONER: Commissioner of Central Excise, Jalandhar

RESPONDENT: M/s. Rajiv Textile Industries & Anr.

DATE OF JUDGMENT: 15/04/2005

BENCH: Ruma Pal, Arijit Pasayat & C.K. Thakker

JUDGMENT: J U D G M E N T

RUMA PAL, J.

       During the years 1995-96, 1996-97 and 1997-98, the  respondent Textile Mills cleared grey cotton canvas clothes  and grey cotton fabrics, without payment of any central  excise duty on the ground that the products were classifiable  under Chapter   52 of the Central Excise and Tariff Act 1985  under which the rate of excise duty was nil at the relevant  point of time.  According to the Revenue Authorities the  goods were classifiable under sub-heading 5911.90 of the  Tariff and liable for central excise duty at the rates specified  on the Tariff.  A show cause notice was issued on 27th  December, 2000 why central excise duty should not be  recovered and why penal action should not be taken against  the respondent. In the meanwhile the respondent- Textile  Mills were closed down in September, 1997 and M/s. Moti  Lal Traders started functioning from the same premises with  the same machinery.  The Additional Commissioner of Central Excise relying  on the case of M/s. Simplex Mills Co. Ltd. Vs CCE  Nagpur: 1993 (49) ECR 147 confirmed the demand of  duty and also imposed personal penalty on the respondent  and ordered interest on the delayed payment. Duty was also  demanded from M/s. Moti Lal Traders and personal penalty  as well as interest was levied.          The respondent and  M/s. Moti Lal Traders both  preferred appeals before the Commissioner of Central Excise  (Appeals). The appeals were allowed by following the  decision of  a larger Bench of the Tribunal in Jyoti  Overseas Limited Vs. CCE, Indore, reported in 2001  (130) ELT 446 which overruled the decision in Simplex  (supra)  and held that cotton fabrics which were not ’made  up’ were correctly classifiable under Chapter 52 and not TH  59.09 (subsequently numbered as 5911.09).       The Tribunal   dismissed the appellant’s appeal on the same ground. The decision in Jyoti Overseas Limited (supra) has  been approved by this Court in our judgment dated 1st  March, 2005 in C.A. Nos. 2816-2818/2002, Commissioner  of Central Excise, Nagpur Vs. M/s. Simplex Mills Co.  Ltd.   We therefore hold that the goods manufactured by the  respondent were classifiable  under  Chapter  52  and  not  under Chapter 5911.90 as contended by the Revenue. The  appeals are accordingly dismissed.